Within the company, I rarely write articles personally. Analyses of global industries, trend forecasts, and policy recommendations are mostly handled by the industrial research department. This isn't because I lack time, but because colleagues often remind me to be cautious with my words, to avoid "loose lips sinking ships" – a single improper statement could cast doubt on their research findings.
However, as a practitioner with fifteen years of deep experience in national economic and industrial research, I believe that in the complex geopolitical landscape and intricate global economy of 2025, it is still necessary to voice some perspectives. Especially for those Chinese entrepreneurs hesitating over whether "to invest in the US, Southeast Asia, or Europe," I hope to provide some rational analysis and well-intentioned advice to help them make calmer decisions.
I. The Historical Context of Chinese Companies "Going Global"
To understand today's investment choices, we must first review the journey of Chinese companies "Going Global."
Phase 1 (Around 2000) – Resource-Driven Expansion
Represented by energy and mining companies, Chinese firms went to Africa, the Middle East, and Latin America primarily to secure the resource supplies needed for rapid domestic economic development.
Phase 2 (2005-2015) – Trade and Capacity Transfer
Manufacturing enterprises began setting up factories overseas, particularly in Southeast Asia, to leverage labor and cost advantages, largely driven by an "export-oriented" model.
Phase 3 (2015-Present) – High-End Manufacturing and Brand Globalization
With the upgrade of Chinese manufacturing, more companies are no longer satisfied with merely handling production. They aspire to compete with global giants in R&D, branding, and market presence. Europe has gradually become one of the most important target markets.
Therefore, discussing investment destinations for Chinese companies today is essentially about their role transformation from "follower" to "competitor," and increasingly to "leader."
II. US-China Competition and Cooperation: A High-Risk Double-Edged Sword
The United States is undoubtedly the world's most important market. Its advantages are evident in
·World-class consumer purchasing power.
·A mature innovation ecosystem and industrial clusters.
·Deep capital markets and a robust financial system.
·But for Chinese companies, the US is also the highest-risk market:
Policy Uncertainty: From the trade friction initiated by the Trump administration to the continuation of industrial policies under the Biden administration, Chinese companies frequently face restrictions in high-tech, new energy, and other sectors.
Stricter Investment Scrutiny: The Committee on Foreign Investment in the United States (CFIUS) rigorously scrutinizes almost all Chinese investments related to strategic industries. Even commercial products can be blocked on "national security" grounds.
Geopolitical Barriers: Competition between the US and China in technology and supply chains has become institutionalized. For years to come, Chinese companies entering the US market will continually face risks of political intervention.
Case Study: TikTok's Challenges in the US
Although ByteDance's TikTok boasts a massive user base in the US, it has been mired in long-term regulatory difficulties over data and security concerns. This case illustrates that even if a product is popular, political and security factors can still become a "ceiling" for Chinese companies.
Conclusion: The US market is vast but is not suitable as the primary investment destination for most medium and large-sized manufacturing and tech companies.
III. Southeast Asia: Coexisting Opportunities and Pitfalls
Southeast Asia, with its young population, rapid urbanization, and industrial transfer, has become a crucial region for Chinese company expansion in recent years.
Advantages:
·Low labor costs.
·Geographical proximity to China, facilitating logistics.
·Enhanced regional cooperation through RCEP and the "Belt and Road" Initiative.
Challenges:
Significant Institutional Differences: Tax systems and investment regulations vary greatly between countries.
Inadequate Industrial Support: Relatively weak infrastructure and limited industrial chain capacity.
Intensifying US-China Rivalry: Some countries vacillate between the US and China, leading to insufficient policy stability.
Case Study: Chinese PV Companies in Vietnam
Many photovoltaic (PV) companies set up factories in Vietnam to circumvent tariffs in Europe and the US. However, due to "rules of origin" issues, some production capacity could not be exported smoothly, ultimately increasing compliance costs for these enterprises.
Conclusion: Southeast Asia is suitable as a supplementary manufacturing base but is difficult to become the core strategic location for medium and large-sized enterprises.
IV. Europe: A New Strategic Highlands
Compared to the high barriers in the US and the high uncertainty in Southeast Asia, Europe's value lies in:
Transparent Institutions and Clear Market Rules: Regulations are strict but predictable.
Strong Industrial Complementarity: China excels in scale manufacturing, while Europe excels in standards, R&D, and high-end markets.
Relatively Friendly Policy Environment: Europe needs China's production capacity and technology in areas like new energy and environmental protection.
PEST Analysis of the European Investment Environment
Political: Although differences exist between China and Europe, the overall space for cooperation is greater than that for confrontation, especially in Central and Eastern European countries.
Economic: Europe is the world's second-largest economy with stable demand, particularly in new energy, transportation, and equipment manufacturing.
Social: European consumers value brands and quality. Chinese companies are transitioning from "competing on price" to "competing on value."
Technological: Europe leads in green technology, automation, and industrial standards. Cooperation with European entities can enhance Chinese companies' global influence.
V. Representative Cases: Successes and Challenges for Chinese Companies in Europe
CATL in Germany: Contemporary Amperex Technology Ltd. (CATL) invested in a battery factory in Thuringia. Despite complex approval processes and union negotiations, it was successfully established. This not only integrated CATL into the European automotive supply chain but also set a precedent for Chinese new energy companies to gain a foothold in Europe.
Sunwoda in Hungary: Sunwoda invested in a battery factory in Budapest, leveraging Hungary's policy support for new energy to access the core German automotive industry region. This project is both a market strategy and a response to Europe's energy transition.
CRRC in Serbia: CRRC undertook the construction of the Belgrade-Budapest high-speed railway. This project not only demonstrated the competitiveness of Chinese high-speed rail technology but also helped Serbia upgrade its transportation infrastructure, becoming a flagship project of the "Belt and Road" Initiative in Europe.
Haier's Acquisition of Candy Italy: Haier entered the European home appliance market through acquisition, utilizing local brand resources and channels to achieve successful localized development. This shows that Chinese companies in Europe are not just investors but also active participants in mergers, acquisitions, and brand integration.
VI. Future Trends and Risk Warning
New Energy and Green Transition: Europe's policy demands regarding carbon neutrality and green industries create huge market opportunities for Chinese companies in new energy, energy storage, and electric vehicles.
Digital Economy and Standard Setting: Breakthroughs by Chinese companies in 5G, AI, and industrial internet require cooperation with Europe to participate in global standard setting.
Potential Risks:
Geopolitical Fluctuations: The US and Europe may align more closely on China policy.
Cultural and Labor Union Challenges: European labor unions are powerful; adaptation to the local labor environment is necessary.
Technology and IP Risks: Cooperation requires guarding against technology spillover and compliance pressures.
VII. Conclusion
United States: Large market but high barriers; not suitable as a primary strategic target.
Southeast Asia: Considerable potential but unstable risks; more suitable as a supplement for manufacturing transfer.
Europe: Transparent institutions, stable market, and industrial complementarity; it is the optimal strategic destination for medium and large-sized Chinese enterprises "Going Global."
In the complex and volatile global economy of 2025, Europe is not just a market; it is a strategic stage where Chinese companies can achieve brand upgrading, industrial chain integration, and enhanced global influence.
Therefore, my final conclusion is: Europe should be the preferred choice for investment and development by medium and large-sized Chinese enterprises.
