Industry experts believe that global expansion will be one of the most important investment themes for Chinese companies over the coming decade. — China Daily
SHANGHAI: Going global is no longer an option for Chinese enterprises but has become a necessity for their growth and development, according to a recent report.
Industry experts believe that global expansion will be one of the most important investment themes for Chinese companies over the coming decade.
Amid adjustments in the global economic landscape, overseas expansion is no longer a strategic choice but a compulsory task for the survival and long-term development of Chinese companies, according to a report titled China’s global reach: Green real estate leads manufacturing overseas surge, published on Jan 15 by London-based global real estate consultancy Knight Frank.
Overseas revenue of Chinese listed companies exceeded 10 trillion yuan or about US$1.4 trillion for the first time in 2024, accounting for 13.8% of their total revenue, according to the report.
In contrast, domestic revenue recorded its first decline in a decade.
Yang Yuechen, Knight Frank’s head of research and consultancy in Shanghai and Beijing, said that from a macro perspective, industrial upgrading and policy guidance have driven a new wave of overseas expansion.
“High-tech industries, green energy and the digital economy have emerged as major investment highlights, with Chinese enterprises steadily moving up the global value chain,” Yang explained.
Data from the report indicate that China’s outbound direct investment continued to grow.
In the first three quarters of last year, total outbound direct investment across all industries reached US$128.93bil, up 3.6% year-on-year.
Among them, non-financial outbound direct investment totalled US$110.74bil, accounting for more than 85% of the total, highlighting the dominant role of the real economy.
By the end of last June, China’s total outbound direct investment had reached US$3.35 trillion, it added.
Such insights are echoed by UBS Securities, which suggested that overseas expansion by Chinese enterprises will be one of the most important investment themes over the next five to 10 years.
Xu Bin, head of research at UBS Securities, took the proportion of offshore revenue among A-share listed companies as an example.
He said that overseas revenue, which accounted for only 3% to 4% of total revenue two decades ago, had risen to 15% in 2024, and continued to increase in the first half of last year.
“This trend will continue over the next five to 10 years and possibly beyond, with the proportion of overseas revenue for Chinese enterprises steadily rising,” Xu said.
Rising overseas revenue not only reflects faster profit growth, but also indicates an improvement in earnings quality, added Xu. — China Daily/ANN
