By South China Morning Post | Created at 2025-01-10 02:01:31 | Updated at 2025-01-10 08:30:36
6 hours ago
This is the second in a three-part series looking at efforts by Chinese companies to step out of their comfort zone and expand abroad amid mounting domestic competition, and how this has resulted in learning curves, labour scandals and more diverse supply chains. The first part can be read here.
After a year of travel in search of overseas venues for his water equipment business, William Hong came away with two words at top of mind: “localisation” and “altruism”.
The denizen of Dongguan – China’s southern manufacturing hub – has been on a journey spanning continents, with stops in Africa, Central Asia, South Asia and South America. But no matter where he went, even countries with warm official relations, worries over Chinese investment and products were omnipresent.
“Export value alone can no longer make overseas markets open to such a large number of Chinese companies and products,” said Hong, who began his career as an emigrant labourer before starting Dongguan Aimeike Valve, a producer of technologically enabled water and electricity meters.
“We need to change our thinking and bring an ‘altruistic’ approach to foreign trade,” he added. “It used to be an empty slogan, but after spending time on the ground, I have come to realise its truth.”
As the country maintains heavy production of goods even while trade barriers appear poised to intensify, many of China’s small and medium-sized enterprises (SMEs) like Aimeike must step out of their comfort zone. Previously content to enjoy the dividends from China’s undisputed status as the “world’s factory”, they are seeking new fortunes overseas.
And on their adventures abroad, they are realising the importance of integrating into local ecosystems. This requires letting go of a big slice of profits to keep things running smoothly – a lesson from their Japanese peers, learned in that country’s expansion wave beginning in the 1980s.
