Chinese electromechanical enterprises enter a new stage of integrated trade and investment
Editor's note: Against the complex backdrop of deep adjustments in the global industrial chain, rising trade protectionism, and intensified domestic market competition, Chinese electromechanical enterprises have reached a historic turning point on their path to going global. The simple product output model is no longer sustainable, and the integrated layout of deep integration of trade and investment is becoming the core strategy for enterprises to build global competitiveness.
At the 19th Annual Meeting of the China Chamber of Commerce for Import and Export of Machinery and Electrical Products, attendees discussed in depth how to achieve a feasible path from "product going global" to "brand going global" and from "single commodity trade" to "global investment and operation" through measures such as strategic upgrading, localized cultivation, ecological synergy, and risk prevention and control, focusing on the theme of innovative models for going global.
When the overseas revenue of China's construction machinery industry exceeds 50%, when the global market share of Chinese electromechanical products steadily increases, and when multiple leading enterprises accelerate the establishment of R&D and manufacturing bases overseas, a clear and firm signal has been released: the globalization process of Chinese electromechanical enterprises has rapidly entered a new stage of deep integration of trade and investment.
The phenomenon of 'internal competition and external overflow' is forcing a change in the mode of operation
The warning from Huang Zhaohua, Chairman of Beijing Haihang Navigation International Management Consulting Co., Ltd., that 'internal competition and external overflow are a path to decline' is thought-provoking. According to the overseas survey report released by its team in 2025, as many as 62% of the competitors faced by Chinese companies in overseas markets will be domestic counterparts. Huang Zhaohua expects to exceed 70% by 2026. Homogenized products, competition in the same channel, and clustering in the same region have led to a spiral decline in sales prices and payment terms, and even serious distortions in the price system, resulting in almost loss making sales.
The essence of this internal spillover indicates that the single trade model is facing obvious bottlenecks. Huang Zhaohua clearly stated that winning by industry, winning by country, upgrading by model, and winning by compliance will form the core pillars of China's electromechanical enterprises' overseas strategy during the 15th Five Year Plan period. Among them, mode upgrade is particularly crucial.
During the 15th Five Year Plan period, how should we provide services, market, and invest? "This question not only reveals the limitations of traditional trade models, but also highlights the urgency for enterprises to establish new capabilities in the reconstruction of the global value chain - simple product output can no longer support sustainable development, and systematic upgrades must be achieved in service, marketing, investment, and other dimensions.
Authoritative data further confirms the urgency of transformation. According to a survey conducted by the China Chamber of Commerce for Machinery and Electronics on its member companies, since 2025, more than half of the companies that have already established production capacity overseas will continue to accelerate investment and local production facilities construction, and increase the proportion of locally purchased components. Overseas markets have become the core engine driving growth. When Huang Zhaohua quoted the judgment of a state-owned enterprise leader, he said, "If the overseas market cannot do well in the next five years, the enterprise will face a survival crisis." This sense of urgency, which is critical to survival, forces the enterprise to abandon opportunism and turn to a strategic driven investment layout.
Deeply cultivate the local area and build a strategic pivot
Strategic upgrading must be supported by localization and deep cultivation. Liu Jiansen, Vice President of XCMG Construction Machinery Co., Ltd., shared the "Way to Deepen Enterprise Internationalization", providing vivid examples for this. As a leading enterprise in China's construction machinery industry, XCMG's internationalization path has undergone a complete evolution from exploration to globalization. At present, XCMG Group has established a global network of 14 regions, over 60 subsidiaries, more than 300 distributors, and over 2000 service outlets overseas, covering more than 190 countries and regions worldwide. It has set a two-step strategy of "reaching the summit of Mount Everest" and is committed to building a world-class enterprise and climbing the global industrial peak. This grand vision relies on systematic engineering with heavy assets and deep local expertise.
Liu Jiansen emphasized that "a true global layout must build solid capabilities in compliance, risk control, ecological cooperation, and other aspects." XCMG Group's practice reveals this key logic: investment is not a simple replacement for trade, but a reconstruction of the value chain. This restructuring process requires enterprises to deeply embed production, research and development, service and other links into the local ecosystem, achieving a qualitative change from "Made in China" to "Created locally". In terms of technological innovation, XCMG Group continues to explore the forefront of electrification and intelligence, establishing differentiated technological capabilities that meet different market demands. In terms of service network construction, XCMG Group has established a global layout of general warehouses, central warehouses, and key project warehouses, forming a fully covered service system; In terms of talent strategy, we adhere to the "fission development" mechanism, with 14 regions upgrading independently once their scale meets the standard, creating an "overseas marketing iron triangle" composed of account managers (AR), solution managers (SR), and delivery managers (FR).
A more profound transformation lies in the localization of business philosophy. Liu Jiansen believes that "to implement localization, we must firmly apply the management core of Chinese culture and not blindly rely on foreign faces." This localization is not simply about hiring local employees, but deeply embedding the supply chain, research and development, and services into the local industrial ecosystem. Taking the African market as an example, XCMG Group is based on the infrastructure needs of countries such as Nigeria. It not only provides equipment, but also offers complete solutions for mining, hoisting, road and other scenarios, achieving a leap from "selling products" to "selling solutions".
The case of the African park shared by Zou Yingyi, the head of the China region of the Shengfei Integrated Industry Platform, confirms the strategic value of investment localization from a third-party perspective. In 2025, China's export growth rate to Africa will reach 26.5%, far exceeding the growth rate to the United States and ASEAN. Chinese photovoltaic companies that have settled in the East African Industrial Park are relocating their Southeast Asian factories to East Africa. With the support services provided by the Shengfei Industrial Park, such as cooperation models, policy connections, and customs clearance convenience, the companies not only receive policy dividends such as certificates of origin, but also become large local photovoltaic producers, achieving a win-win situation of market position and policy advantages.
Building competitive barriers with 'heavy assets'
The deep challenge of trade and investment integration lies in building a corporate ecosystem that supports global operations. Shen Jianbing, Chairman of Hangzhou Fudebao Technology Co., Ltd., shared the "heavy asset overseas path of carrying heavy loads" from the perspective of small and medium-sized enterprise practitioners. At the end of 2018, amidst the prevalence of the light asset model in cross-border e-commerce, he took the opposite approach and chose to delve into the target market, form local teams, and focus on offline channels. This seemingly non-traditional path precisely constructs a competitive barrier that is difficult to replicate.
Shen Jianbing's core insight stems from precise positioning of target customers. These downstream distributors of traditional foreign trade merchants have multi category and small batch procurement characteristics, making it difficult to directly import from China in the short term. The core demand of such customers is not simply product supply, but a systematic capability that includes stable spot supply, professional technical solutions, and timely after-sales service. To this end, the company chose to explore dual markets at the beginning of its entrepreneurship, cultivating local product manager teams from scratch in Mexico and Indonesia, and shaping Chinese brands as "trusted local partners" through a management approach of "respecting culture and fully empowering". In 2024, the Ford brand has become one of the most influential brands in Mexico, verifying the long-term value of the heavy asset and deeply rooted model.
This practice precisely confirms the essence of trade and investment integration, which is to reject the temptation of short-term traffic and choose the path of "continuous value creation rather than simple marketing". Through the systematic construction of product power, service power, and brand power, the supply chain innovation capability is transformed into the trust value of end consumers.
Comprehensively upgrade the risk control system
The integration of trade and investment not only expands growth space, but also exposes a more complex risk map. Director Guan Jian of Beijing Guangwen Law Firm warns that ten years ago, changing the place of origin could resolve more than 80% of trade frictions, but now "relocating factories overseas is not a one-time solution". The risk list it has compiled is alarming: anti circumvention investigations, cross-border subsidy investigations, export control sanctions, government procurement discrimination, cybersecurity reviews, etc. have far exceeded the scope of traditional anti-dumping and anti subsidy measures.
In response to the current complex risk environment, Guan Jian suggests that companies urgently need to establish a systematic prevention and control framework: firstly, carefully evaluate the comprehensive risks of the investment destination country. Although some countries have cost advantages, they may quickly trigger new anti-dumping investigations. Therefore, site selection decisions need to go beyond the single dimension of labor costs and comprehensively consider multiple factors such as the country's trade policy history, economic and trade relations with major economies, and industrial competition patterns.
Secondly, it is necessary to have a deep understanding and truly meet the requirements of the rules of origin. The European Union and the United States are becoming increasingly stringent in their determination of origin, with a particular focus on substantive transformation standards. What needs to be more vigilant is anti circumvention investigations, which require far more than conventional rules of origin.
Thirdly, optimize the equity structure and design the overseas model. State owned enterprises have limited equity adjustment space due to the requirement of value preservation and appreciation; Private enterprises are more flexible and can adopt diversified methods such as joint ventures and equity participation. In terms of going global, it is not limited to exporting goods or building factories overseas, and technology output is equally important. For enterprises that master core technologies, light asset models such as technology authorization and commissioned production can be adopted to maintain control and reduce investment risks.
Fourthly, establish a dynamic compliance monitoring and early warning mechanism. Enterprises should establish a dedicated compliance team to track policy changes in the target market in real time, and conduct scenario simulations and stress tests on potential risks. At the same time, improve document management and data traceability system to ensure that sufficient evidence chain can be provided in case of investigation.
Fifth, strengthen the flexibility and diversified layout of the supply chain. Avoid excessive reliance on a single production base or supplier, and enhance the supply chain's risk resistance through multi-point layout, dual source procurement of key components, and other methods. Having the flexibility to quickly adjust production layout when facing origin investigations or trade frictions can effectively reduce the risk of business interruption.
Finally, make good use of professional services and policy support. We should actively leverage the power of professional institutions such as law firms and consulting firms, while closely monitoring and fully utilizing the overseas support policies provided by the Chinese government in taxation, credit insurance, financing, etc., to form an internal and external risk prevention and control network.