China’s leading private firms strike gold in overseas markets: survey
News Summary
Despite many Chinese companies facing soft domestic demand and an uncertain international trade environment last year (2024), the country's leading private enterprises reported double-digit growth in their overseas revenue, according to a recent survey by the All-China Federation of Industry and Commerce. The federation's 2025 edition of the Top 500 Private Enterprises revealed that China's 500 largest private firms generated a combined overseas revenue of 3.19 trillion yuan (US$445.8 billion) last year, an increase of nearly 15 percent from 2023. The top three firms remained JD.com, Alibaba, and Hengli Group, with minor shifts among the top 10, which also include Huawei Technologies, BYD, and Tencent. The report noted that "facing heightened external pressures and increasing internal challenges...the top 500 private firms have maintained an overall trend of steady progress, with improvements in quality, profitability and core competitiveness." This assessment comes amid an improved policy environment for the private sector, which officially contributes over half of China’s total tax revenue, 60 percent of its GDP, and 80 percent of urban jobs.
Background
China's private sector is a critical component of its national economy, contributing 60% of GDP, over 50% of tax revenue, and 80% of urban jobs. In recent years, Chinese private enterprises have faced multiple headwinds, including slowing domestic demand, property market adjustments, and external trade uncertainties exacerbated by rising geopolitical tensions. On the policy front, the Chinese government has been working to stabilize and boost confidence in the private sector, following periods of regulatory tightening in certain industries, particularly tech and education. Chinese President Xi Jinping's rare meeting with top entrepreneurs also underscored the government's recognition of the sector's strategic importance, especially amidst the ongoing US-China tech rivalry. The reported growth in overseas revenue suggests Chinese firms are actively diversifying internationally to navigate domestic challenges and capitalize on global opportunities.
In-Depth AI Insights
What are the true drivers behind the overseas expansion of China's private enterprises? - Superficially, it's about seeking new growth points and mitigating domestic market weakness and regulatory uncertainties. However, the deeper driver is that under global supply chain restructuring and geopolitical pressures, Chinese firms are actively or passively de-risking their operations by diversifying overseas revenue to reduce reliance on a single market. - This expansion also reflects China's deepening influence in emerging and developing markets under the Belt and Road Initiative. Much of this overseas revenue might not be from mature Western markets but from regions with strong demand for Chinese technology and infrastructure. How does the Trump administration's "America First" policy influence Chinese companies' overseas strategies? - The incumbent Trump administration's protectionist and hawkish stance on China compels Chinese companies to pivot from direct engagement with the US market towards building more resilient global business networks through other regions, such as Southeast Asia, the Middle East, Latin America, and Africa. - This strategy helps circumvent potential tariff barriers, investment restrictions, and supply chain scrutiny. Simultaneously, it allows them to establish new technological standards and business ecosystems in non-Western markets, potentially eroding US dominance in the global economic system over the medium to long term. What does the improved overseas profitability of China's leading private firms signify for China's economic structural transformation and the global tech competition landscape? - It indicates that China's economy is gradually shifting from an over-reliance on exports and investment towards a "dual circulation" strategy that emphasizes technological self-reliance and globalized operations. Private enterprises are key drivers of this transformation, with their overseas success enhancing China's resilience in global value chains. - In global tech competition, the success of companies like Huawei, BYD, and Tencent in overseas markets is not merely commercial expansion but also the outward projection of Chinese technological standards and innovation models. This could lead to "parallel universes" in areas like global digital infrastructure and EV ecosystems, where China-driven alternatives coexist with Western-dominated systems, profoundly impacting the long-term geoeconomic order.