In Focus: Top Destinations for Chinese Companies Overseas

Chinese companies have been actively seeking opportunities to expand their operations overseas -- not only to establish a global footprint but also to diversify their revenue streams and talent base.

Three prominent markets have garnered significant attention as attractive investment destinations for Chinese investors: North America, Germany, and the Netherlands.

Despite growing geopolitical complexity, North America, given its vast market potential and technological advancements, has remained an attractive destination for Chinese businesses investing in sectors such as technology, real estate, and manufacturing.

Similarly, Germany and the Netherlands have emerged as key destinations for Chinese companies. Chinese companies are drawn to Germany's strong manufacturing base and technological prowess in areas such as automobile manufacturing, high technology, new energy, and semiconductors. The German market also represents a valuable resource of know-how and technologies that are essential for China to move up the global value chains and pursue long-term growth driven by innovation.

The Netherlands, known for its favorable business climate, strategic location, and thriving education system, has become a gateway for Chinese companies to access the European markets. It has emerged as one of the most popular destinations for overseas Chinese investments, particularly among enterprises that seek to accelerate their growth through mergers and acquisitions. Following a mega deal made in 2022, the Netherlands has emerged as the leading choice for Chinese companies seeking investment opportunities in Europe.

Chinese companies expanding overseas are committed to growing in their host country for the long term and are eager to learn from and adapt to the local business environment.

However, they need to be aware of the huge cultural differences between China and Western economies. According to Wayne Chen Wei, CEO of CGL Consulting Business, Chinese companies tend to underestimate the cultural challenges facing them when expanding overseas.

"People from different cultural backgrounds tend to have very different assumptions about life and work, and these assumptions could adversely impact the positive relationship dynamics that promote teamwork and operating efficiency," said Wayne.

He added: "Promoting mutual understanding and empathy among Chinese and foreign employees is crucial for success. Companies need to have strong leadership skills and be culturally sensitive in order to build sustainable relationships with foreign customers, partners, and employees."

Wayne also emphasized that when operating globally, particularly to attract global talent to work for them, Chinese enterprises need to build a "less hierarchical, more empathetic, more diverse, and inclusive culture and organization. This kind of culture is certainly good for continuous learning and innovation, which is critical for the sustainable growth of Chinese companies."

In addition to companies, Chinese talent has also been seeking opportunities abroad, driven by the desire for international exposure, better career prospects, and access to advanced educational resources.