Moving manufacturing abroad now go-to method to counter challenges
Chinese manufacturers are diversifying their layouts in overseas emerging markets, especially in Southeast Asia, the Middle East and Africa, so as to navigate challenges from trade protectionist policies and tariff hikes emanating from the United States.
Experts said Chinese manufacturers are actively adjusting their globalization strategies amid external uncertainties, while mitigating the risks of over-dependency on too few markets and elevating their positions in global industrial chains through intensified research and development investment and technological innovation.
They made the comments after US President Donald Trump announced 25 percent additional tariffs on Canadian and Mexican imports, but later postponed those tariffs. He also announced an additional 10 percent tariff on Chinese goods.
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Chinese consumer electronics company TCL Technology Group Corp has established photovoltaic cell and module factories in Malaysia and the Philippines through joint ventures, while its intelligent terminals unit has set up production bases in Vietnam, Poland, Brazil and India.
"Looking ahead, we will actively consider increasing industrial centers in Africa and strengthening our business in the Middle East," said Li Dongsheng, founder and chairman of TCL.
Li said Chinese manufacturers should shift from exporting products to exporting industrial capacity, accelerate the building of global industrial chains and improve localized operations in overseas markets.
Hisense Group, a leading Chinese home appliance maker, is ramping up localized production and research capabilities in member economies of the Association of Southeast Asian Nations and Latin America, and increasing investment in technological innovation to target high-end markets abroad.
This strategic expansion will enable Hisense to better serve customers and strengthen its global competitive position, the company said. The Qingdao, Shandong province-based company has also invested heavily in African countries.
Jia Shaoqian, chairman of Hisense, said the company is speeding up its business footprint in Nigeria, Angola, Egypt, Algeria and Morocco by establishing new production bases and facilities.
For instance, it signed an agreement with local partners to establish a new factory in Egypt last year. The plant will cover an area of about 13.33 hectares, and commence production this year.
To hedge against the negative impacts of Trump's tariff policies, Chinese manufacturers are increasing their manufacturing capacities in various emerging markets and adjusting their layouts overseas, said Chen Hui, general manager of market consultancy AVC Revo.
The Middle East and Africa serve as important markets participating in the Belt and Road Initiative, presenting huge growth potential for Chinese enterprises to expand their global footprint, Chen said.
Zhu Keli, founding director of the China Institute of New Economy, said it is of vital significance for Chinese enterprises to make strategic adjustments in their go global strategies and diversify business layouts in emerging markets against the backdrop of geopolitical tensions and tougher US tariff measures.
Zhu said the diversification of production capacities in Southeast Asia, the Middle East and Africa will help enterprises lower international logistics costs, enhance brand awareness and influence, and drive local economic and social development.
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Moreover, Chinese enterprises should strengthen localized operations, set up research and development centers and marketing networks, and pool more resources into technological innovation so as to improve competitiveness globally and better serve demand in offshore markets.
Haier Smart Home, a subsidiary of Haier Group, is stepping up efforts to expand its presence in the Middle East through establishing an industrial park that produces air conditioners, TVs, refrigerators and freezers in Egypt.
The General Administration of Customs said China's exports to over 160 countries and regions saw growth in 2024. Exports to ASEAN economies and those involved in the Belt and Road Initiative grew by 13.4 percent and 9.6 percent year-on-year, respectively.
He Zhiyi, chief expert from the Institute for Global Industry at Tsinghua University, said against the backdrop of the restructuring of global supply chains, it is essential to "build world-class enterprises "through self-reliant innovation and optimize the layout in industrial chains to "form a more balanced and stable development pattern in both developed and developing countries".
