Four in Ten Chinese Industrial Companies Are Considering Going Global. Yet 99% Are Still Just Selling Products

China’s overseas expansion is real—but for most industrial companies, globalization has barely moved beyond exporting.

“Going global” has become one of the hottest phrases in Chinese business. The headlines suggest Chinese companies are already spreading rapidly across the world, from Southeast Asia and the Middle East to Europe and Latin America.

The latest survey data tell a more nuanced story.

Cheung Kong Graduate School of Business surveyed 2,020 industrial enterprises above designated size in the second quarter of 2026. The survey found that 44.1% had already taken steps toward overseas expansion or relocating production capacity, or were planning to do so.

That is a significant share. Going global is no longer a strategy reserved for a handful of large companies. It has become part of the business agenda for a much broader group of Chinese industrial enterprises.

But there is a striking gap between intention and depth.

Among the 891 Chinese companies that had taken overseas action or had such plans, 98.99% identified product exports as a core model of international expansion. Only 2.7% had established overseas sales and service networks, 4.7% had moved production capacity abroad, and just 2.1% had expanded overseas through R&D, technology or standards.

On a bigger picture, Chinese industrial companies are globalizing—but mostly from home.

Southeast Asia Leads. Europe Still Matters.

Among surveyed Chinese companies with overseas expansion activities or plans, Southeast Asia was the most popular destination, selected by 57.8% of respondents.

The reasons are practical. Southeast Asia is close to China, deeply connected to Chinese supply chains, has an established industrial base and offers growing consumer markets. For manufacturers looking to move beyond exports, it is also one of the more accessible regions in which to begin localizing operations.

But Europe, selected by 43.3%, ranked second.

That is notable given Europe’s high costs, demanding compliance requirements and extensive regulation. Yet its purchasing power, industrial standards and brand value remain attractive. For companies with established product quality and technological capabilities, Europe offers more than customers: it is a test of competitiveness and brand strength.

North America was selected by 23.7%, followed by East Asia at 21.3%. Meanwhile, the Middle East, North Africa and other parts of the “Global South” were mentioned by 9.3%, while Latin America was selected by just 1.0%.

The lesson is that corporate expansion does not always follow geopolitical headlines. Companies tend to ask more basic questions: Where are the customers? Can the supply chain connect? Will the products sell? Can management oversee operations? Are the risks controllable?

For many manufacturers, Southeast Asia is simply an easier place to start. Europe, meanwhile, remains attractive because mature markets can offer both high-quality demand and the opportunity to prove that products and brands can compete globally.

Demand, Not Tariffs, Is Driving the Push

The survey is even clearer on the question of why companies are going abroad.

The search for new overseas markets and demand was cited by 85.2% of respondents—far ahead of every other motivation.

The second most common reason was supporting downstream customers’ overseas operations, at 19.2%.

By comparison, only 5.8% cited excess domestic supply or intense competition. Just 2.2% pointed to avoiding tariffs and trade barriers or improving their global footprint. Only 1.0% cited lower labor or raw-material costs.

That challenges a common assumption about Chinese overseas expansion.

Going global is often portrayed as a way to escape tariffs, relocate production or cut costs. The companies themselves tell a different story. Their primary objective is much simpler: find more customers and new sources of growth.

That also explains why exporting remains so dominant.

Selling products overseas allows companies to test demand without immediately committing to factories, service centers, local teams or other costly infrastructure. If orders become stable and customers demand faster delivery or localized support, companies can then move further into overseas sales, services and production.

There is another route: following customers.

The 19.2% of companies expanding overseas to support downstream customers point to a form of globalization driven by industrial relationships. When a major customer builds a factory abroad, suppliers may need to move closer. When customers demand localized support, suppliers have to extend their service and delivery capabilities.

For these companies, globalization is less a leap into the unknown than an extension of an existing business network.

Going Deeper Means Paying With Your Own Cash

The survey also examined funding, investment and implementation challenges, although these questions received only 64 valid responses. The findings should therefore not be extrapolated to all companies going abroad.

Still, the results offer a useful glimpse into companies that have moved beyond exporting.

Among the 64 companies, retained corporate funds accounted for an average of 71.8% of initial funding for overseas operations or capacity relocation. Domestic bank loans accounted for 14.3%, local overseas financing for 8.4%, and investment institutions or private equity for just 1.9%.

The message is clear: companies entering deeper overseas expansion are relying primarily on their own balance sheets.

Investment levels reveal a sharp divide. 26.6% of the 64 companies reported zero overseas-related investment for the current year, while 20.3% invested between RMB 0 and RMB 2 million. At the other end, 35.9% reported investments exceeding RMB 50 million.

The middle ranges were relatively sparse: 7.8% invested between RMB 2 million and RMB 5 million, 9.4% between RMB 5 million and RMB 20 million, and none reported investments between RMB 20 million and RMB 50 million.

The pattern looks less like a smooth progression than a split. Some companies are still testing overseas opportunities with limited commitments; others have already begun making substantial investments.

That is consistent with the economics of industrial globalization. Exporting can be scaled gradually. Building factories, warehouses, service networks and local teams cannot.

The Hardest Part Is Not Financing

For companies already implementing overseas expansion, the biggest challenge was geopolitical and policy uncertainty, cited by 51.6%.

Local regulations, environmental requirements and compliance reviews followed at 46.9%.

Other major obstacles included inadequate local supply chains or infrastructure at 34.4% and cultural differences or difficulties in labor relations at 26.6%.

Only 12.5% cited insufficient local operational or management talent. Insufficient funding or difficulties with cross-border financing ranked last, at just 3.1%.

This is perhaps one of the survey’s most revealing findings.

For companies that have already gone deeper overseas, money is not the biggest problem. The harder challenge is operating inside unfamiliar institutional systems.

Are policies stable? Are environmental reviews predictable? How do labor and tax systems work? Can local suppliers meet requirements? Are logistics reliable? Can headquarters effectively manage teams thousands of kilometers away?

Most Companies Expect No Overseas Revenue Boom

Companies are also remarkably cautious about the payoff.

Among the 891 companies with overseas expansion activities or plans, 63.4% expect the share of revenue generated overseas to remain broadly unchanged over the next three years. Another 22.0% expect it to increase slightly. Only 0.3% expect a significant increase. Meanwhile, 6.6% expect a decline, while 7.6% remain uncertain.

In other words, most companies are not treating overseas expansion as an immediate growth miracle. They expect international business to develop gradually and remain one part of their overall business.

That caution is also evident among companies staying at home.

Of the 1,129 companies with no current overseas expansion or production relocation activities or plans, 34.5% said their industry was not suited to going abroad. 23.1% cited insufficient corporate scale or financial strength, while 16.7% said the domestic market still offered sufficient room for growth. A lack of overseas channels and resources accounted for 11.1%, while geopolitical and compliance risks accounted for 7.5%.

Not going abroad, then, is not necessarily a sign of weakness. For some companies, staying focused on China may simply be the more rational business decision.

For Chinese Companies, Globalization Is Happening—But It Is Still Early

The survey shows that Chinese industrial globalization is gathering momentum but remains at an early stage.

Rather than a sweeping industrial migration, Chinese businesses’ global expansion is unfolding along different paths—through exports, customer-led expansion, local sales and services, and eventually production, R&D or technology. For now, most companies are taking the safest first step: the product goes global first; the organization comes later, if at all.