China’s Global Expansion Outlook 2025-2026: OFDI and Digitalization as Twin Engines

Macro Environment: Rising External Uncertainty, Accelerating Internal Upgrading

Amid global geopolitical tensions and rising trade barriers, Chinese companies’ global expansion is shifting from “scale expansion” to “quality improvement.” In 2024, China’s outward non-financial direct investment (OFDI) is expected to reach approximately USD 130 billion, a slight year-on-year increase. Looking ahead to 2025-2026, OFDI growth may slow due to factors such as a strong dollar and stricter overseas regulations, but it will maintain positive momentum, with an annual growth rate of about 8%–10%, potentially exceeding USD 160 billion by 2026.

Industry Trends: New Energy and Technology Lead the Way

• New Energy Vehicle (NEV) Supply Chain: Chinese automakers are accelerating overseas factory construction. In 2025, the electrification rate in Southeast Asia will drive opportunities for supporting battery and charging infrastructure exports. It is expected that the market share of Chinese-brand NEVs sold overseas will rise from 12% in 2024 to 18% in 2026.
• Cross-border E-commerce: Platformization and branding go hand in hand, with models like SHEIN and TikTok Shop continuing to penetrate. China’s cross-border e-commerce retail exports are projected to reach USD 280 billion in 2025 and exceed USD 320 billion in 2026, while compliance costs must be watched.
• Digital Services: Enterprise software (SaaS) and fintech are seeing growing demand abroad, especially in Southeast Asia and the Middle East. The market share of Chinese cloud service providers is expected to rise from 12% in 2024 to 16% in 2026.

Regional Strategy: Southeast Asia, Middle East, and Latin America as Focus Areas

• Southeast Asia: Remains the top destination but with fierce competition; localization capabilities become decisive. Chinese companies should shift from low-price strategies to brand and after-sales differentiation.
• Middle East: Saudi Arabia’s Vision 2030 and the UAE’s economic transformation offer opportunities in infrastructure, energy, and technology cooperation, but cultural integration is essential.
• Latin America: Under the manufacturing reshoring policies of Brazil and Mexico, Chinese supply chain companies can leverage nearshoring advantages.

Forward-Looking Recommendations: Manage Risks, Deepen Integration

1. Compliance first: Become familiar with local tax laws and data privacy regulations; establish a compliance team.
2. Digital efficiency: Use AI and big data to optimize supply chains and marketing, reducing trial-and-error costs.
3. Local talent: Cultivate or recruit teams with global perspectives and local experience.
4. Ecosystem collaboration: Coordinate with overseas think tanks, chambers of commerce, and Chinese enterprise clusters to mitigate political risks.

Overall, in 2025-2026, Chinese companies going global will focus more on sustainable value creation rather than mere scale growth. With technology empowerment and precise regional deployment, Chinese brands are poised to achieve a qualitative leap in global markets.