At some point, the question of “why expand internationally?” ceased to trouble entrepreneurs. Instead, the focus has shifted to more pressing considerations: “where to expand” and “how to achieve success overseas.” Against the backdrop of intensifying domestic market competition, venturing abroad to break through challenges and identify new growth opportunities has become a critical pathway for businesses to overcome bottlenecks. Chinese enterprises, in particular, have now entered the 4.0 era of internationalisation, where product excellence and brand strength are the core drivers of competitiveness. With increasingly diverse approaches to global expansion, they are charting ever broader territories.

According to statistics, in the first half of 2024, China's total outbound direct investment increased by 16.1% year-on-year, with non-financial direct investment rising by 19.5%. These investments spanned 152 countries and regions worldwide, involving 5,532 overseas enterprises—demonstrating the robust momentum of Chinese companies going global. Prior to this, China's total outbound direct investment had already achieved steady growth for four consecutive years. With the support of favourable policies such as the Opinions on Strengthening Business and Financial Coordination to Support High-Quality Development of Cross-Border Trade and Investment (《关于加强商务和金融协同 更大力度支持跨境贸易和投资高质量发展的意见》)and the Opinions on Expanding Cross-Border E-Commerce Exports and Promoting the Construction of Overseas Warehouses (《关于拓展跨境电商出口推进海外仓建设的意见》), the environment for Chinese businesses venturing overseas is expected to be further optimised, injecting vitality into their global ambitions.

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Amid the backdrop of a sluggish global economy, emerging markets with their robust growth momentum and vast potential have become focal points for cross-border businesses seeking new opportunities. Regions such as Southeast Asia, Latin America, the Middle East, and Africa are actively sending signals to attract international enterprises. Among these, Southeast Asia stands out as the top destination for Chinese companies expanding overseas, thanks to its unique advantages in economy, demographics, manufacturing, and digitalisation.

The reasons behind Southeast Asia's appeal are clear. Countries like Thailand, Malaysia, and Indonesia boast large, youthful populations, injecting continuous vitality into the market. Young people, passionate about trends and new experiences, form the backbone of consumer spending. With rising purchasing power, a growing middle class, and an expanding base of internet users, the region's e-commerce sector is experiencing rapid growth, offering convenient marketing channels and vast market opportunities to businesses. At the same time, relatively low labour costs have fostered a mature supply chain and manufacturing ecosystem in Southeast Asia, providing multinational companies with an affordable production base.

Furthermore, Southeast Asian nations maintain an open stance toward foreign enterprises, offering generous support policies and fostering a favourable business environment. With the official implementation of the Regional Comprehensive Economic Partnership (RCEP), trade between Southeast Asia and China has become even more integrated. Tariff reduction policies have lowered trade costs and invigorated commercial activity, paving a smoother path for Chinese companies to expand into Southeast Asia.

Currently, Southeast Asia's sustained high economic growth suggests unlimited potential for the future. By 2030, the region is expected to emerge as the world's fourth-largest economy, representing an enormous market, abundant resources, and boundless opportunities. For enterprises venturing abroad, this is a vast and promising stage for development.

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In recent years, China's approach to expanding into Southeast Asia has undergone significant transformation, moving away from low-cost manufacturing to a more advanced and diversified strategy. Chinese products and services are no longer simplistically labelled as “cheap” or “low-end,” as the barriers to economic and trade exchanges between the two regions continue to diminish.

With the strategic upgrading of China's manufacturing sector and the steady expansion of production capacity, an increasing number of high-end industrial products are making their way to overseas markets. As China's close neighbour, Southeast Asia naturally becomes the first destination for these exports. From manufacturing sectors such as electric vehicles, lithium batteries, and solar products to modern services including emerging platforms like SHEIN, TEMU, TIKTOK, and AliExpress, and further to industries like logistics and dining, Southeast Asia has gradually established itself as the primary choice for Chinese companies entering overseas markets. Between 2021 and 2023, China's cumulative manufacturing investment in Southeast Asia exceeded $40 billion, far outpacing investments in regions such as Europe and Latin America.

In the smartphone market, Chinese brands such as OPPO, vivo, and Xiaomi have captured a significant share of Southeast Asia's market. Meanwhile, in the realm of new consumer brands, China's tea and dining concepts have been warmly embraced in Southeast Asia, thanks to the shared similarities in culinary culture between the two regions.

It is also worth mentioning that the rapid growth of Southeast Asia's e-commerce sector has positioned the region as the preferred testing ground for numerous to-business (ToB) Software-as-a-Service (SaaS) platforms expanding abroad. Singapore, with its strategic geographic location, financial advantages, and tax incentives, has become a frontline hub and global operations base for many Chinese companies venturing overseas.

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Of course, while overseas markets present vast opportunities for growth, they also harbour numerous traps and hidden risks. In the great wave of international expansion in 2024, the narrative is no longer solely about geographic expansion. Instead, it's now a comprehensive competition requiring wisdom, courage, and strong compliance capabilities. Constrained by the rise of unilateralism and protectionism internationally, compliance has become a critical defence line for businesses venturing abroad. Companies must not only adhere to local laws and regulations but also remain vigilant to changes in international rules to ensure the smooth operation of their overseas activities.

As we step into 2024, ESG (Environmental, Social, and Governance) considerations have shifted from a peripheral topic to a critical issue integral to the survival and development of businesses. With the global commitment to sustainable development taking root, ESG performance has become a vital metric for evaluating corporate value. Governments, NGOs, consumers, and investors all now use ESG as a key criterion for assessing businesses. For enterprises aiming to expand globally, ignoring ESG compliance is tantamount to self-sabotage in an increasingly demanding environment.

The momentum of Chinese businesses expanding globally is unstoppable, but companies must continue to enhance their capabilities to advance on the global stage with greater resilience. By identifying business opportunities while remaining cautious of potential risks and challenges, strengthening compliance management, and improving ESG performance, businesses can establish a competitive edge in fiercely contested markets and achieve higher levels of growth.