Chinese enterprises venturing abroad are not only a key driving force in advancing economic globalization, but also face increasingly complex structural risks and challenges amid their transformation from the early stage of "product exports "to "system exports" and "ecosystem co-building".
At an executive meeting of the State Council, China's Cabinet, on Sept 12, officials reviewed measures to improve the overseas comprehensive service system. The meeting stressed the need to provide strong support for Chinese enterprises to better participate in international cooperation and competition, and further refine the overseas service framework.
Currently, challenges confronting Chinese companies going global extend across the entire business chain and can be categorized into five major areas.
First are legal and compliance risks. Regulatory regimes vary greatly across countries and regions. Enterprises unfamiliar with local market access rules or industry regulations can easily fall into legal and bureaucratic quagmires.
Meanwhile, cross-border data compliance requirements continue to tighten, with the EU's General Data Protection Regulation setting particularly high standards for data collection, storage and transfer.
As companies expand their global intellectual property portfolios, related disputes are also on the rise. Statistics show that 146 countries worldwide have enacted more than 190 data security-related laws and regulations, while in the automobile sector alone, Chinese companies spend over 20 billion yuan ($2.81 billion) annually on net intellectual property costs.
Second are operational and localization challenges. Cultural differences pose a primary barrier, which may lead to mismatches between product design and local consumer needs, as well as difficulties in managing employees.
Due to the lack of historical operating data in overseas markets, companies struggle to accurately set product prices, while weak local service networks hurt user experience — with some firms forced to bear higher service costs due to inadequate claims or warranty issues abroad.
Moreover, the tendency of some enterprises to apply domestic "involution" competition models internationally undermines sustainable development in overseas markets. For example, certain Chinese brands misjudge the positioning of foreign luxury brands, resulting in strategic errors.
Third are financial constraints and insufficient funding support. Small and medium-sized foreign trade enterprises, squeezed by rising raw material costs and longer cross-border payment cycles, often face liquidity strains and "mismatched payment terms". New overseas subsidiaries, lacking credit histories, also struggle to secure local financing.
Fourth are supply chains and logistics bottlenecks. Global shipping capacity, especially roll-on/roll-off vessels for automobiles, remains persistently tight. Chinese shipping companies account for only 15 percent of the world's auto ro-ro capacity, falling short of meeting enterprises' demand.
At the same time, supply chain restructuring, rising geopolitical tensions and growing trade protectionism — including tariff hikes and stricter technical standards — are increasing costs and uncertainties for Chinese companies' global operations.
Finally, there are emerging and structural risks. Escalating geopolitical conflicts threaten the security of overseas assets and may force companies to adjust market layouts. Environmental, social and governance — and sustainability standards — have become new thresholds, excluding firms that fail to comply from participating in international cooperation.
Stricter supervision of cybersecurity and data protection is also raising the bar for digital operations. The full implementation of the EU's Carbon Border Adjustment Mechanism, along with the enforcement of supply chain due diligence laws in multiple countries, is reshaping compliance requirements for enterprises going global.
To address these challenges, enterprises, governments and professional service institutions must work together to build a holistic support system for overseas expansion. Efforts can be advanced in five areas.
First, strengthen compliance capacity and risk prevention. Companies should integrate risk management into core strategic decisions and treat it as a prerequisite for feasibility studies. They need to conduct in-depth research on target market regulations, with a focus on critical areas such as data compliance (like GDPR), intellectual property and ESG.
As Qi Meng, a professor at the school of international law of Shanghai University of Political Science and Law, noted: "Compliance spending is not a waste, but one of the most worthwhile strategic investments. Compliance has become the threshold for market access and client acquisition, and also a form of soft power."
At the same time, enterprises should leverage external expertise from law firms, accounting firms and consultancies, and make use of instruments such as export credit insurance.
Second, deepen localization and cultural integration. Companies going global should shift from "product confidence" to "cultural humility". Beyond simple translation, they need to build cultural sensitivity mechanisms — as exemplified by TikTok and Shein — to capture local trends and consumer habits, while adopting artificial intelligence generated content tools to enhance localized content creation and cultural adaptation testing.
On the services side, they should proactively collaborate with local partners to share resources and establish localized service systems. For example, AXA Tianping and PICC's partnership in Thailand, which combines technology export, channel integration and service collaboration, offers a mature model for localized service support.
Third, innovate financial services and funding models. Addressing financing bottlenecks requires both policy-backed and market-driven solutions.
For cross-border financing, the "domestic guarantee plus overseas loan with RMB flow-back" model designed by Agricultural Bank of China's Xuzhou branch for XCMG illustrates how parent company guarantees can help subsidiaries abroad secure loans despite limited credit records or collateral.
On the policy side, local financial regulators in Zhejiang and Fujian provinces have already piloted targeted initiatives — such as market demand surveys and dedicated financing service zones — to support SMEs, with notable success.
Fourth, build comprehensive service systems and ecosystem-based globalization. Governments, industry associations and service providers should work together to create full-chain service platforms for going global.
Domestically, centers such as the Hongqiao overseas development service center in Shanghai provide "three lists" — services, policies and activities — while overseas service stations help form a coordinated network supporting enterprises from preparation to landing abroad.
Meanwhile, cluster-based models such as "ecosystem groups" or "fleet-style" expansion — led by flagship companies and followed by upstream and downstream partners — can lower risks and costs.
Fifth, embrace digital transformation and technological innovation. Digital tools can enhance both operational efficiency and risk management.
For instance, Nota Sign's global e-signature solutions comply with multiple jurisdictions' data protection laws, accelerating cross-border document processing while ensuring compliance.
AI can also strengthen decision-making and operations, from predicting foreign exchange trends and managing payment risks, to testing cultural adaptability and analyzing consumer demand, enabling more precise product and market strategies.
In summary, Chinese enterprises are undergoing a profound shift in their overseas journeys — from "going out" to "going in", and further toward "global integration".
Although the challenges span compliance, operations, finance and supply chains, enterprises that front-load risk management, localize operations, diversify financial support, build ecosystem-based services and embrace digital transformation will be better positioned to compete globally in a sustainable way.
This process requires not only stronger corporate capabilities, but also policy guidance, resource coordination and the support of professional service institutions and global partners.
Ultimately, successful overseas expansion is more than the enlargement of a corporate footprint — it is also a process of Chinese companies integrating into global business civilization, applying "Eastern wisdom" to explore new models of globalization, and contributing China's strength to global economic growth.
The writer is a researcher at the national academy of development and strategy, Renmin University of China.
The views do not necessarily reflect those of China Daily.
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