Chinese companies enter a new phase of global expansion, IE University-CKGSB report finds

IE University’s China Observatory and Cheung Kong Graduate School of Business (CKGSB) have published Chinese Companies’ New Playbook for Going Global, a joint report on how Chinese companies are changing their approach to international expansion as global markets become more fragmented.

Launched at the Tech in Asia Conference in Singapore, the report identifies “capability export” as a third phase in the internationalization of Chinese companies.

The shift goes beyond the export of products or the creation of overseas sales channels. Chinese companies are taking capabilities developed in their domestic markets into international markets, including technical standards, product development, supply-chain organization, customer service, branding and business models. These capabilities must then be adapted to local conditions.

Bridging organizational and cultural divides.

The report examines the human, organizational and cultural dimensions of international expansion, particularly in cross-border acquisitions.

Bin Ma, Professor at IE University and Academic Director of the China Observatory, examines the role of executives who bridge organizational, cultural and institutional differences during these transactions.

“Boundary spanners, or experienced executives dispatched from the acquiring company to work within the newly acquired organization, are likely to be among the most important yet often overlooked sources of competitive advantage,” he writes.

José Félix Valdivieso, Chairman of the China Observatory at IE University, argues that international expansion requires Chinese companies to transfer capabilities as well as products.

“Chinese companies must increasingly export knowledge, entrepreneurial spirit, organizational capabilities and management systems,” he explains.

Localization and international growth.

Led by Li Wei, Professor of Economics and Associate Dean at CKGSB, the report examines localization as a central element of international expansion.

“The next generation of winners will be those that understand local politics, respect local rules, invest in local capabilities and build trust with local stakeholders,” writes Li Haitao, Dean and Dean’s Distinguished Chair Professor of Finance at CKGSB.

Field research in Southeast Asia shows why strategies that work in China cannot simply be transferred to overseas markets. Price, speed and scale do not by themselves guarantee international success. Companies also face fragmented demand, regulatory complexity, local-content requirements, incomplete supply chains and cultural differences.

Two models of international expansion.

The report identifies two models of international expansion among Chinese companies.

“Chain-style globalization” describes the expansion of large companies alongside their suppliers and partners, with entire industrial ecosystems extending into overseas markets.

“Swarm-style globalization” refers to the rapid international expansion of smaller companies with support from Chinese industrial clusters, cross-border platforms, logistics networks, overseas warehouses and other shared infrastructure.

These models affect both Chinese companies and the markets in which they operate. Multinational corporations and Southeast Asian businesses may face new competitive pressures while also finding opportunities to work with Chinese companies that seek local expertise, talent and networks.

The report examines what these developments mean for Chinese companies that seek international growth and for global and regional businesses that compete or collaborate with them. It also provides a framework for understanding how Chinese multinational companies may operate across markets as their international presence expands.