China's Global Influence Increases
The rise of China is reshaping the global economic landscape: growing competition, substantial investments in supply chains, and ambitious infrastructure projects are redefining the market environment worldwide.
For years, China has systematically expanded its presence in foreign markets, reaching the rest of the world through innovation, quality and endurance.
The People's Republic of China is pursuing a long-term modernization strategy leading up to the 100th anniversary of the founding of the People's Republic in 2049. There are a lot of policy initiatives that are aimed at getting the country to the top of the global technology and economic scene and making it less dependent on other countries. To this end, China is building complete value chains, securing critical raw materials, and controlling transport routes and logistics infrastructure.
Initiatives such as “Made in China 2025,” the “New Silk Road,” and the “Five-Year Plans” are designed to work in coordination, combining government resources and providing targeted support for key technologies. As a result, Chinese companies are increasingly active in high-tech fields such as renewable energy, electric mobility, digital infrastructure, mechanical engineering, robotics, and industrial services. This means they are increasingly competing directly with mainly European firms in key third-party markets in Asia, Africa, Latin America, and Eastern Europe.
For the local companies targeting to operating worldwide in technology, industrial, and software, this represents a fundamental shift in the competitive landscape. It is no longer sufficient to compete in their domestic markets and staying local. Chinese competitors are now systematically establishing production footprints across these markets — often at price points and with financial terms that Western competitors simply cannot match.
The rising dominance of Chinese corporations in worldwide markets presents a strategic obstacle for Europe and Germany. Through the Global Gateway initiative, the EU is pushing its global presence and leveraging trade policy tools to ensure fair competition. The German government, in its approach to China, is concentrating on reducing risks, diversifying sources, and enhancing economic resilience. Similarly, other nations are adopting de-risking strategies to lessen their reliance on China, particularly in securing vital raw materials.
The question is not whether this matters for your business. The question is whether you understand it clearly enough to build a counter-strategy before the competitive window closes.
China's Steps For Global Expansion
What makes China's current expansion particularly interesting is that it is not a single initiative. It is a sequence of strategies that reinforce one another with devastating effectiveness and global market penetration.
The 1st Initiative in the Year 2000: "Going Global"
In the year 2000, China launched the "Going Global" initiative, a strategic policy aimed at encouraging Chinese enterprises to expand their operations and investments beyond domestic borders. This initiative marked a significant shift in China's economic strategy, transitioning from a focus on attracting foreign investment to promoting Chinese companies as global players.
The primary objectives of the "Going Global" initiative were to:
- Enhance Competitiveness: By encouraging Chinese firms to invest overseas, the initiative aimed to enhance their competitiveness in the global market. This included acquiring advanced technologies, accessing new markets, and gaining valuable management experience.
- Diversify Resources: The initiative sought to help Chinese companies secure essential resources, such as energy and raw materials, but also learning about foreign technologies and know-how which were crucial for sustaining China's rapid economic growth. By investing in resource-rich countries, Chinese firms could ensure a stable supply chain, and get information about global demand and competition.
- Promote Economic Growth: The "Going Global" strategy was also intended to stimulate domestic economic growth by creating new opportunities for Chinese businesses and fostering innovation through international collaboration.
- Strengthen Global Presence: The initiative aimed to elevate China's status on the global stage, allowing Chinese companies to establish a more significant presence in international markets and contribute to the country's economic diplomacy.
The Chinese government supported the "Going Global" initiative through various measures, including:
- Financial Support: The government provided financial incentives, such as low-interest loans and subsidies, to encourage companies to invest abroad. State-owned enterprises (SOEs) were particularly targeted, as they had the resources and backing to undertake large-scale international projects.
- Policy Framework: The government established a policy framework that facilitated overseas investments, including simplifying approval processes and providing guidance on international business practices.
- Bilateral Agreements: China entered into numerous bilateral investment treaties to protect its investments and promote economic cooperation with other countries.
As a result of the "Going Global" initiative, Chinese companies began to make significant investments in various sectors worldwide, including energy, infrastructure, telecommunications, and manufacturing. Notable examples include:
- Energy Sector: Chinese firms like China National Petroleum Corporation (CNPC) and Sinopec invested heavily in oil and gas projects in Africa, the Middle East, and South America, securing vital energy resources for China.
- Infrastructure Projects: Companies such as China Road and Bridge Corporation (CRBC) and China Communications Construction Company (CCCC) undertook major infrastructure projects in developing countries, contributing to the Belt and Road Initiative (BRI) that followed in 2013.
- Technology Acquisition: Chinese tech companies, including Huawei and ZTE, expanded their operations globally, acquiring foreign firms to enhance their technological capabilities and market reach.
The 2nd Initiative in the Year 2013: "Belt And Road Initiative"
Since its launch in 2013, the BRI has served multiple strategic objectives simultaneously: opening new markets, securing raw material supplies, and providing Chinese companies with first-hand experience operating in foreign markets.
Now in its tenth year, Made in China 2025 modernises domestic Chinese production infrastructure, focusing on ten strategic technology areas: robotics, electric vehicles, renewable energy equipment, semiconductors, advanced materials, biomedics, railway technology, marine technology, industrial automation, and high-end equipment manufacturing.
The programme is not aspirational. It is delivering measurable results. Chinese companies have already achieved leadership positions in 37 of 44 critical technologies tracked by the Australian Strategic Policy Institute. The programme is specifically designed to create internationally competitive products that can be exported globally.
The Belt and Road Initiative: The Distribution and Market Access Arm
In H1 2025, the strategy shifted decisively toward industrial projects.
The scale is staggering: 572 new BRI projects in the first half of 2025 alone, compared to 512 in the same period of 2024. The geographic focus is now concentrated in regions of highest strategic value:
Southeast Asia (ASEAN): 178 project announcements with 109 industrial projects. Thailand and Vietnam lead with 31 industrial projects each. Critically, seven of the world's 17 new automotive parts initiatives are now in Thailand — directly competing in a sector where German companies have traditionally dominated regional supply chains.
Africa: 176 projects, with 38 industrial initiatives. Egypt alone accounts for 17 projects, including a major chemical works valued at $7.5 billion for ethylene and propylene production.
Latin America: 21 nations have signed Belt and Road Initiative declarations since 2018. Chinese direct investment has totalled approximately $193 billion since 2000. China has become the leading trading partner for five critical economies: Bolivia, Brazil, Chile, Panama, and Peru.
Middle East: Large-scale infrastructure projects including a $6 billion solar facility with storage in the UAE, a $17 billion oil project in Iraq, and a $9 billion port development in Kuwait.
Europe, by contrast, has become a secondary focus, with only 16 projects — signalling that China has largely conceded Europe to Western competitors and is focusing resources on higher-growth, higher-margin markets in the Global South.
Strategic Raw Material Control: The Supply Chain Lock
China's dominance in critical raw materials is not primarily a mining story. It is a processing and refinement story.
The EU identifies 34 critical raw materials essential for modern technology. China ranks in the top three producers for 27 of them. More critically, China accounts for 51.5% of global refining production by value.
The specifics are sobering:
- Heavy rare earths: 100% Chinese processing
- Light rare earths: 85% processing
- Magnesium: 91% processing
- Gallium (semiconductor material): 94% processing
- Germanium (semiconductor material): 83% processing
This dominance is sustained through massive domestic refining capacity, lower labour costs, historically lax environmental regulation, and subsidised energy prices. More strategically, China prohibits foreign investment in mining and processing of tungsten, rare earths, and radioactive minerals — the most strategically critical materials.
The consequence: As the EU seeks alternative supply chains, it faces a structural problem. Viable alternatives cannot emerge at competitive prices unless fundamental economics — energy costs, environmental standards, labour costs — are rethought globally. This is not a short-term problem. This is a structural dependency that will constrain European competitiveness for years.
How the Three Strategies Interlock: The Mechanism
China's brilliance lies in how these three strategies amplify each other.
MIC25 creates technologies — renewable energy equipment, electric vehicle components, semiconductor manufacturing tools, industrial automation systems.
The BRI creates the distribution network and market access. In renewable energy, which now comprises 48% of all new energy projects, Chinese firms are not primarily building manufacturing capacity for solar panels or wind turbine components abroad. Instead, they are building renewable energy infrastructure using predominantly Chinese-supplied equipment, which simultaneously drives demand for MIC25 products.
Raw material control ensures the supply chains cannot be easily disrupted, and that any alternative producers must operate under economic constraints that make them less competitive than Chinese suppliers.
The political and financial infrastructure supports all three. The China Development Bank finances Chinese companies participating in energy, road, telecommunications, and port projects. The EXIM Bank of China provides concessional lending for development assistance and export credits. Bilateral agreements with countries like Ecuador and Argentina provide additional financial support — China recently renewed a $5 billion currency swap line with Argentina through July 2026, with total swap agreements totalling $18 billion.
This is not market competition. This is state-directed strategic expansion backed by coordinated industrial policy, diplomatic pressure, and integrated financing mechanisms.
The Sectoral and Geographic Battleground: Where Competition Is Sharpest
Southeast Asia: The Industrial Production Shift
Thailand and Vietnam lead with 31 industrial projects each. Electronics and metal processing dominate in Vietnam. Automotive parts — seven of the world's 17 new automotive initiatives — cluster in Thailand.
This matters because it is not happening in peripheral markets. It is happening in the core supply chain regions where German companies have historically enjoyed competitive advantages.
The projects are diverse in company structure — not uniformly large state-owned enterprises, but a range of companies from The Third Construction (five projects) to numerous smaller firms. This heterogeneity makes Chinese competition harder to predict and counter.
Latin America: Raw Materials, Logistics, and Strategic Positioning
China is the leading trading partner for Bolivia, Brazil, Chile, Panama, and Peru. Chinese investment focuses on energy (58.3% of accumulated investments), mining and raw materials (23.2%), and transport infrastructure (9%).
The most strategically significant project is Peru's Chancay deep-water port. The Chinese shipping operator Cosco Shipping Ports invested approximately $1.3 billion in partnership with local players. The port is positioned to become South America's most important Pacific gateway and will shorten transport times to Brazil significantly.
Additionally, a pre-feasibility study is underway for a railway connecting Chancay to Pucallpa, potentially creating a long-term transoceanic link between Pacific and Atlantic trade routes. Another project — the Tren Bioceánico connecting Brazil, Peru, and Bolivia — carries an estimated value of $7.5 billion, with China expected to finance $3.5 billion.
For German companies, the implication is critical: supply chain routes, market access points, and logistics infrastructure that were based on historical geography are being fundamentally redrawn. A company that enters these markets without understanding these emerging logistics networks will find its positioning obsolete within five years.
For Chile specifically, China has become the country's largest trading partner, accounting for 38% of exports in 2024. In retail, Chinese import dominance is overwhelming — 37% of imported consumer goods are Chinese, with dominance reaching 68% in clothing, 55% in electronics, and 52% in footwear.
Raw Material Strategic Control in Practice
In Peru, China Minmetals, China Three Gorges Corporation, Chinalco, and other Chinese investors have invested over $32 billion across mining, energy, and logistics sectors since 2005. China is the dominant investor in Peruvian mining, with three-quarters of Peruvian copper going to China.
More significantly, Chinese companies are modernizing mining operations with autonomous systems, cloud services, 5G infrastructure, and AI algorithms. In Toromocho mine, Chinalco operates autonomous drills controlled remotely from a facility 150 kilometers away, powered by Huawei 5G infrastructure and AI algorithms.
This is not low-cost, low-tech competition. This is the cutting edge of industrial technology being deployed to consolidate Chinese control over supply chains.
The Competitive Pressure Vectors: Where You Will Feel This
The competitive pressure is arriving on multiple fronts simultaneously, and understanding where it hits your business is critical.
Pressure Vector 1: Third Market Competition
Chinese companies are systematically establishing production presence in target markets — not to serve the local market, but to position themselves as integrated solutions providers combining manufacturing, financing, installation, and ongoing support.
Unlike traditional infrastructure projects managed by the same state-owned enterprises, industrial projects show significantly greater heterogeneity in company structure, making them more difficult to predict and counter.
Pressure Vector 2: Supply Chain and Raw Material Dependency
In 2022, 46% of German industrial companies reported dependence on critical imports from China. By 2024, this had fallen to 37% — but this masks the reality that for critical materials, dependency has become more structural, not less.
German companies are particularly dependent on Chinese imports of chemicals and pharmaceuticals (85 product categories at 50%+ import share from China), electronics (38 categories), raw materials (24 categories), and specific items including semiconductors, rare earth metals, and batteries.
Pressure Vector 3: Technology Competition
Chinese firms are upgrading the technological sophistication of their international projects. This is no longer low-cost, low-tech competition. This is increasingly head-to-head technological competition in advanced manufacturing, automation, and digital infrastructure.
Pressure Vector 4: The Financing Advantage
Chinese companies operate with integrated financing that Western competitors often cannot match. The government banking system — China Development Bank, EXIM Bank — provides financing as part of the project package, and bilateral credit lines provide additional financial flexibility.
For many buyers in developing markets, the ability of a Chinese vendor to finance 60-70% of a project is not a competitive advantage. It is often a decision-making factor that outweighs product superiority or price per unit.
The De-Risking Challenge: Why Current European Strategy Is Necessary but Insufficient
Germany and Europe are pursuing "de-risking" strategies to reduce dependencies on China while maintaining business relationships. This is sensible policy. But the reality is sobering.
German DAX companies generate extraordinary revenue percentages from China: Volkswagen and BMW over 36-40%, Infineon 32%, Mercedes-Benz 31%. These are not easily diversifiable dependencies.
While Germany has invested $122 billion in cumulative direct investment in China, Chinese direct investment in Germany totals only $5 billion — a significant asymmetry.
The structural problem: Germany's share of China's exports and imports has declined, while Germany's dependence on the Chinese market and Chinese supply chains has increased. This is a dangerous asymmetry that de-risking alone cannot resolve.
What Companies Must Do Now: The Strategic Imperative for Global Competitiveness
For technology, industrial, and software companies planning international expansion, success in the current environment requires a fundamentally different approach than what worked ten years ago. Here are the non-negotiable elements:
1. Map Regional Value Chains and Emerging Infrastructure, Not Just Bilateral Trade
Chinese infrastructure investments are reshaping how regions connect. A company entering Southeast Asia or Latin America without understanding the emerging logistics networks, port developments, and rail connections being built by Chinese partners will misread the competitive landscape fundamentally.
What this requires: Before committing capital to a market, commission a detailed analysis of:
- Emerging logistics infrastructure and how it reshapes supply chain routes
- Chinese competitive positioning in your specific sector in that region
- Local partnerships and financing mechanisms Chinese competitors are offering
- Long-term port and rail development that will change market access patterns
2. Evaluate Supply Chain Vulnerability Early — Before Market Entry
If your products depend on critical materials where China controls processing capacity, your margins and market access are hostage to geopolitical dynamics you cannot control. This must be understood — and planned around — before major market entry investments.
For companies dependent on rare earth magnets, semiconductor materials, or battery components, Chinese processing dominance means structural cost advantages for Chinese competitors that cannot be quickly overcome through efficiency improvements alone.
What this requires: Conduct a critical materials audit of your entire product ecosystem. If you are dependent on materials where China controls 80%+ of processing, develop a specific strategy: can you substitute materials? Can you secure direct supply agreements? Can you build redundancy into your supply chain?
3. Identify Emerging Chinese Competitors Early — Before They Become Dominant
Chinese competitors are not uniformly large state-owned enterprises. Many are smaller, more agile, and willing to operate at lower margins than Western competitors to establish market presence. By the time you see a Chinese competitor as a serious threat, they have often already established relationships, financing, and local partnerships that make them difficult to displace.
What this requires: In your target markets, systematically research which Chinese companies are active, what they are offering, what financing mechanisms they are using, and what local partnerships they have established. This intelligence gathering must happen during your market evaluation phase, not after you have already committed resources.
4. Build Integrated Solutions, Not Just Product Features
In markets where Chinese companies are offering integrated solutions — products, financing, installation, ongoing technical support, remote monitoring via 5G and cloud — competing on product features or price alone is insufficient. You need to understand what a genuinely valuable partnership looks like in that market, and whether your cost structure allows you to deliver it.
What this requires: Before market entry, understand the total cost of ownership from the buyer's perspective, including financing costs, installation, training, and support. If Chinese competitors are offering all-in solutions at price points your margin structure cannot support, you need to differentiate on other dimensions: reliability, local presence, integration with existing infrastructure, or regulatory/compliance advantages.
5. Understand the Diplomatic and Political Environment
China's economic expansion is flanked by diplomatic and financial support. 21 Latin American and Caribbean nations have signed Belt and Road Initiative declarations. China has free trade agreements with multiple countries and is actively negotiating additional ones.
This is not neutral competition. The Chinese state is actively supporting its companies through diplomatic channels, financing mechanisms, and regulatory frameworks that create competitive advantages that market forces alone cannot generate.
What this requires: When evaluating markets, understand not just the market dynamics, but the geopolitical positioning. A market where China has strong diplomatic relationships, has financed major infrastructure, and has established multiple supply chain touchpoints is a market where Chinese companies will have structural advantages that you must account for in your strategy.
6. Conduct Genuine Market Intelligence, Not Just Desk Research
Real market intelligence means understanding who the actual buyers are in a given market, how purchasing decisions are made and by whom, what the competitive landscape looks like from the inside, and what the unspoken criteria are that determine vendor selection. It means knowing which distribution channels carry weight and which ones look significant on paper but deliver nothing in practice.
What this requires: Before major market commitment, spend time on the ground. Meet with potential customers, distributors, and partners. Understand the competitive landscape from the perspective of people who operate in it daily, not from publicly available data and analyst reports.
The Timeline: The Competitive Window Is Closing
The industrial boom accelerating in 2025 represents a qualitative shift from what was happening two or three years ago. For European and German companies, this creates both a competitive urgency and a strategic opportunity.
The urgency: If you have not yet entered certain strategic third markets, the competitive advantage of early entry is narrowing rapidly. Chinese companies have already established relationships, financed infrastructure, and built local partnerships that make market entry more difficult for latecomers.
The opportunity: Companies that understand these shifts now, position themselves effectively, and build strategies around the emerging realities will outcompete those that treat 2025 as a continuation of 2015.
The strategic window is open. But it is closing faster than most companies realise.
What Must Change in Your International Expansion Strategy
If you are a CEO, founder, or revenue leader evaluating international expansion, here is what must change in your approach:
1. Conduct a China Competitive Audit for Every Target Market Before entering a market, understand what Chinese companies are active there, what they are offering, what they are financing, and what market share they are pursuing. This is not optional intelligence. It is foundational.
2. Map Supply Chain Vulnerabilities Before Market Entry If you are dependent on critical materials or components where China dominates processing or supply, your cost structure and competitive positioning are at risk. Understand this before committing capital.
3. Build Partnerships That Integrate Financing, Not Just Distribution In markets where Chinese competitors offer integrated financing, you cannot compete on product and price alone. You need to understand what integrated solutions look like and whether you can deliver them.
4. Position Yourself as a Long-Term Committed Partner, Not a Transactional Vendor Chinese companies are building presence and partnerships for the long term. Buyers in developing markets are increasingly skeptical of Western companies that appear to be extracting value rather than building relationships.
5. Understand the Geopolitical Dimension Markets are not neutral competitive spaces. Understand China's diplomatic positioning, the infrastructure it has financed, the trade relationships it has established, and how this creates structural advantages for Chinese competitors.
6. Invest in Real Market Intelligence, Not Desk Research The difference between companies that succeed in international expansion and those that fail is often the quality of market intelligence. Real intelligence requires on-the-ground presence, relationships with local stakeholders, and deep understanding of how markets actually work — not how they appear in analyst reports.
How G&E Sales Helps Companies Succeed in This Environment
At G&E Sales, we specialize in exactly this challenge: helping technology, industrial, and software companies build international expansion strategies that account for how markets are actually changing right now.
Our approach is comprehensive and grounded in on-the-ground market reality:
Market Analysis and Competitive Intelligence
We conduct detailed market analyses that go far beyond publicly available data. Our analysis addresses:
- Competitive landscape mapping: Who are the active competitors in your target market? What are they offering? What financing mechanisms are they using? What market share are they pursuing?
- Chinese competitive positioning: For markets where Chinese companies are active, we conduct specific analysis of their presence, their strategic positioning, and the implications for your business.
- Supply chain and raw material assessment: If your business depends on critical materials, we analyze your vulnerability and help you develop mitigation strategies.
- Geopolitical and infrastructure analysis: We map the emerging logistics networks, port developments, and rail connections that are reshaping how regions connect — and what this means for market access and supply chain routes.
Strategic Positioning and Market Entry Planning
We help you develop expansion strategies that account for the actual competitive landscape:
- Integrated solution design: Understanding what total-cost-of-ownership looks like from the buyer's perspective, including financing, installation, support, and integration with existing systems.
- Partnership development: Identifying the right partners in target markets — distributors, integrators, local companies — who can help you navigate local relationships and regulatory environments.
- Financing and risk mitigation: Understanding financing mechanisms available in target markets and helping you develop strategies to match or exceed what Chinese competitors are offering.
- Regulatory and compliance positioning: Understanding the regulatory environment, compliance requirements, and how these create either barriers or competitive advantages for your business.
On-the-Ground Market Presence and Relationships
We maintain active networks in key international markets through our global delegation participation and on-the-ground relationships. This means:
- Real market intelligence: Access to insights from people operating in target markets daily, not analyst reports.
- Partnership facilitation: Direct relationships with potential partners, distributors, government bodies, and industry associations in target markets.
- Ongoing market monitoring: Continuous tracking of competitive developments, new entrants, and market shifts that could affect your positioning.
Customized Market Analysis Reports
For companies serious about international expansion, we develop customized market analysis reports for your specific niche and target market. These reports provide:
- Detailed competitive landscape analysis including Chinese competitor positioning
- Supply chain and raw material vulnerability assessment
- Financing landscape and buyer cost-of-ownership analysis
- Emerging infrastructure and logistics network mapping
- Regulatory and geopolitical analysis
- Specific, actionable recommendations for market entry strategy
The Strategic Conversation Starts Here
If you are a CEO, founder, or revenue leader of a technology, industrial, or software company considering international expansion, the question is not whether you need to expand. The question is whether you will expand strategically, with eyes wide open to how markets are actually changing, or whether you will discover competitive realities only after you have committed significant capital.
The difference between success and failure in international expansion is often the quality of market intelligence and the clarity of strategic positioning. In the current environment, where Chinese competitors are systematically reshaping how regions connect and how value chains operate, this intelligence and strategic clarity are more important than they have ever been.
📩 Contact G&E Sales today — and let's have a strategic conversation about what international expansion could actually look like for your business.
We offer a complimentary initial consultation to understand your business, your target markets, and the specific competitive and market intelligence challenges you are facing. From there, we can discuss whether a customized market analysis report — tailored to your specific product category, target markets, and competitive situation — would be valuable for your expansion planning.
This is not about market reports or consultant hand-waving. This is about real, actionable market intelligence grounded in on-the-ground relationships and deep understanding of how markets actually work.
Reach out to G&E Sales — and let's build your international expansion strategy on a foundation that will actually hold.
G&E Sales is a global expansion partner for technology, industrial, and innovative product companies. We help businesses understand market realities, build competitive strategies, secure the right partnerships, and scale revenue across borders — grounded in real market insight, on-the-ground relationships, and strategic clarity.
We have supported companies across Europe, North America, and Asia in building successful international expansion strategies. We would welcome the opportunity to do the same for you.