Chinese Mainland enterprises are taking a more diversified approach to international expansion in an unpredictable and fast-changing world.
This includes developing sales networks, optimising supply chains, investing directly in production facilities and participating more widely in tech collaboration, among a range of high-value areas.
A recent survey of Mainland firms starting to venture abroad showed that 54% of them plan to enhance their sourcing operations in overseas markets. Additionally, 47% aim to expand their sales networks and 36% intend to strengthen technology cooperation with international partners.
The findings – based on a poll of more than 2,000 manufacturers and service providers – highlight a shift beyond traditional import and export activities towards more comprehensive business strategies with a greater emphasis on operational capabilities and competitiveness.
The survey was conducted by the Hong Kong Trade Development Council (HKTDC) earlier this year, as part of an ongoing programme to monitor the outbound business activities of Mainland firms. The research covered four key regions in the Chinese Mainland: the Bohai Economic Rim in the north, the Yangtze River Delta in the east, the Pearl River Delta in the south, and the Central and Western regions.
Overall, 95% of participants were interested in developing overseas, with 82% seeking to expand existing operations and 63% pursuing new business activities.
These ambitions are taking shape against a backdrop of shifting trade policies, geopolitical risk, rising protectionism and intensified competition, increasing demand for expert guidance.
“With the overseas expansion strategies of Mainland enterprises now extending to supply chain integration, cross-border investment and higher value-added business activities, the need for highly professional support services has continued to grow,” commented Bruce Pang, Director of HKTDC Research.
When looking for assistance with their overseas expansion, 83% of surveyed enterprises named Hong Kong as their preferred services platform, ahead of the Chinese Mainland (78%) and Singapore (31%). Collectively, firms were interested in a variety of services, including marketing, legal and accounting advisory, financing and risk management, supply chain management, R&D, product standards and ESG-related support.
Wing Chu, Deputy Director of HKTDC Research, pointed out that most Mainland enterprises expanding abroad plan to develop two to three overseas business functions.
“During this process they face major challenges, including difficulty coping with rapidly changing market uncertainties, intense competition in overseas markets and insufficient capital to adjust business operations and supply chains," Mr Chu said. “These challenges underline the growing need for professional services support.”
Belt and Road opportunities
Meanwhile, Belt and Road markets have become central to these goals, with 94% of surveyed companies confirming their interest in developing business in these territories.
That’s a significant increase on the 73% of respondents that were eyeing Belt and Road markets in a comparable survey from 2023.
In addition, 91% of companies in the latest poll prioritised expanding their ASEAN activities, particularly in Singapore (49%), Vietnam (46%), Thailand (44%) and Malaysia (41%).
Looking further afield, 48% intend to target Europe’s advanced markets, while 47% plan to expand engagement with the US and Canada.
Alongside this, interest in the Middle East rose from 33% in 2023 to 46% this year. The proportion looking to expand into Latin America doubled from 17% to 34%.
The full report exploring these survey findings in more detail, titled Mainland Enterprises’ Global Expansion: Hong Kong – The Premier Service Platform, can be downloaded here.
Meanwhile, this year’s Belt and Road Summit, a major platform for policy dialogue, business networking and deal-making, will feature breakout sessions on overseas expansion opportunities and Hong Kong’s professional services strengths, as part of moves to further support Chinese Mainland enterprises going global.
This year’s summit, which is taking place in Hong Kong on 9-10 September, will also introduce a GoGlobal Connect zone to showcase service offerings from Hong Kong, while providing consultation and practical support.
In addition, a GoGlobal Business Mission to Nansha in Guangzhou will offer participants first-hand insights into the latest developments in the Guangdong-Hong Kong-Macao Greater Bay Area.