One winter in St. Moritz, Nick showed up in a Descente jacket—the sleek Japanese brand that outfits the Swiss national ski team and whose China joint venture is majority owned by the Chinese company Anta. He'd bought the jacket in China, complete with the embroidered Swiss team logos. In the café at the base, strangers assumed he skied for Switzerland and asked where he trained. "I love Anta," Nick recalls with a laugh, "but then they saw me ski and realized I certainly wasn't a member of the national team."

A mountain anecdote is fitting for a company that climbed from China's factory floor to the global summit of sportswear in just two decades. Anta exemplifies China's next era of globalization as Chinese companies move beyond exporting goods to operating globally—through acquisitions, partnerships, and global-first models—while also learning to govern, build legitimacy, and compete under unfamiliar rules and frictions.

Today Anta is $30 billion by market cap. In 1991, it was an ambitious shoe workshop in Jinjiang, Fujian province—one among hundreds of original equipment manufacturers (OEMs) competing on cost, volume, and reliability. Playing the classic "factory for the world" role, the workshop supplied others while building scale and process know-how. Then came the leap: in 1999, founder Shizhong Ding launched the Anta brand, signed Olympic table tennis champion Linghui Kong, and poured profits into a marketing blitz around the 2000 Sydney Games. Anta quickly became China's value alternative to Nike and adidas.

Over the next twenty years, Anta assembled a multi-brand empire, locking down China rights for FILA, Descente, and Kolon Sport. In 2019, it pulled off a landmark move by becoming majority shareholder of Finland's Amer Sports conglomerate; suddenly, Anta owned Arc'teryx, Salomon, Wilson, and more. "It was a marriage of brand heritage and product excellence, accelerated by Anta's execution capabilities in China," says Frank Tang, co-founder of FountainVest, the investor partner of Anta in Amer Sports.

Anta now runs R&D centers on three continents, sponsors NBA stars and international athletes, and includes in its retail base more than thirteen thousand stores. It's now the third largest sportswear company by market cap—ten times Puma or Under Armour—and, combined with Amer, surpasses adidas. Anta's 2024 listing of Amer Sports on the New York Stock Exchange marked the first US IPO of a Chinese consumer company of its scale.

Anta's global reach has come with its share of comic moments. When Dominic Barton was invited to open Arc'teryx's Shanghai flagship in 2020, he was baffled: Why would the Canadian ambassador to China open a store for a Chinese company? Dominic sought out the PR manager to inquire. "There was fifteen seconds of silence," he recalls. "Finally, he told me, 'You're from Vancouver, right? Arc'teryx is a North Vancouver company.'" Dominic reflects, "It's amazing that it took a Chinese company to globalize a Canadian brand from my hometown."

Not every Chinese company's path abroad looks like Anta's. Some try acquisition; others try brand building, organic expansions, or partnerships; and still others try a combination. What's clear is the trend: slowing growth, intense competition, and thinning margins have pushed outward expansion from an option into a necessity across sectors—from medical devices and instruments to toys, home electronics, and e-commerce platforms. We call this chuhai—"going into the oceans." For most Chinese companies, a unit sold overseas generates significantly higher margins than an equivalent unit sold at home. Globalization is not just a growth strategy—it's a profitability strategy.

"The next twenty years will be about Chinese companies going international," says Wei Fu, the ever-energetic founder and CEO of CBC Group, the largest Asian healthcare private equity firm. "It doesn't matter whether you speak the language or whether you know these markets in North America, Europe, Africa, South America, and elsewhere. If you can, you do it. If you cannot, you will likely lose out. Find the right talents, the right experiences, assemble the right capabilities to get it done."

How do Chinese companies make the leap from local champion to true global multinational—not just selling worldwide but operating as global citizens? What new cultural, organizational, and strategic muscles are required? What can Chinese firms and established multinationals learn from the collisions ahead? This chapter explores the rise of China's global contenders, the obstacles they face abroad, and the lessons they must absorb. They will need to learn fast—and the world is already watching.

The contours of China's rise as the world's factory are familiar. We now turn our focus to what that factory produced. China's first era of globalization forged capabilities far beyond low-cost manufacturing—robotics, data systems, and world-class production efficiency—introducing the deeply adaptive Chinese factory that reshaped global supply chains and became both the envy and the anxiety of the industrialized world. These capabilities were honed at home, but they weren't meant to stay there.

Yet the geopolitical context has also shifted. Free trade has given way to "strategic" trade, where managing critical dependencies and national competitiveness matters as much as efficiency. Tariffs and protectionist measures are surging worldwide. Globally, the number of restrictive trade actions rose from roughly six hundred to seven hundred before COVID to more than three thousand to four thousand today.

Yet reshoring—production returning home from overseas—hasn't materialized at a global scale. Instead what has gained traction is friendshoring, the practice of shifting production and trade toward politically aligned partners. Goods are traveling just as far, if not farther—they are just taking different paths. McKinsey finds that the average geopolitical distance of the global goods trade began compressing around 2018. From 2018 to 2024, total US imports grew by nearly a third, even as imports from China dropped about 20 percent. China's export engine adapted by redirecting more goods through new corridors such as Southeast Asia. In lower-tech categories, Chinese entrepreneurs are replicating their successes in Vietnam, Indonesia, and Cambodia.

China remains the backbone of global manufacturing, but the source of future growth is shifting. The next leap will come from tapping that accumulated "muscle memory"—engineering depth, process discipline, operational excellence—and transforming into global multinationals that innovate, brand, and lead worldwide.

As Chinese firms grew richer and more ambitious, they faced a simple question: How do we expand faster? One client invokes the proverb of "crossing the river by feeling the stones" and then adds, "But if I can build a bridge, I will get across much quicker without the pain."

For outward-looking Chinese companies, mergers and acquisitions (M&A) became that bridge. As we've mentioned, most Chinese firms are only two to three decades old. "Even the biggest, most successful Chinese companies have just passed the survival line and are only now starting to think about culture, brand, and heritage," says Herry Han, a prominent tech investor and founder of Soul Capital. What they've sometimes lacked—global brands, loyal customers, trusted relationships, seasoned management, and credibility—can take decades to build organically.

Outbound M&A offers a shortcut. When Lenovo bought IBM's Thinkpad PC division, it acquired factories as well as a worldview: labs, testing discipline, quality standards, and talent. In the best cases, Chinese owners can extract value in both directions, scaling the acquired brand in China while also tapping its know-how to upgrade the parent company's core.

Japanese companies are a particular source of fascination for many of our Chinese clients. The attraction? Decades of diligence and restraint, loyal customers, and steady revenues that represent almost the inverse of Chinese corporate culture. The folklore of sushi apprentices cleaning knives for years before cutting their first fish never fails to captivate; regardless, the most admired Japanese companies aren't for sale.

During the 2010s, Chinese outbound deals increasingly skewed opportunistic, driven by hubris and a fear of missing out. These stories are legendary: Anbang's $2 billion purchase of New York's Waldorf Astoria became emblematic—a trophy deal that later collapsed when regulators seized the company. "Anbang" is now shorthand for a Chinese buying spree gone wrong.

Outbound M&A peaked in 2016, when Chinese companies spent $227 billion on foreign acquisitions—six times what foreign companies spent on Chinese firms. Soon, regulators cracked down on speculative deals, domestic balance sheets tightened, and governments in Europe and North America grew more protective. We saw many Chinese CEOs infer "this is risky—better not do it." Indeed, many deals struggle under a mismatch of cultures, over-leveraging, weak post-merger integration, or sudden regulatory shifts.

Yet across markets, disciplined "serial acquirers" consistently outperform companies that stick to organic growth strategies. But M&A is a muscle, and value is created—or destroyed—in post-merger integration, requiring experienced teams and a repeatable playbook. That, in turn, requires a mindset shift on the part of Chinese CEOs. Instead of "We can do it better," the logic should be "We can grow their brand in China better than they can—and they can help us expand globally better than we can alone." After a period of policy-driven retrenchment starting in 2017, there's been a measured rebound in interest in recent years.

The bridge to compressing a decade of progress into three years is there, though Chinese companies are still early on this curve. Consider the following examples.

Geely's acquisition of Volvo. This story traces back to the 2008 financial crisis, when Ford Motor Company, short on cash and shedding non-core assets, put Volvo up for sale. It was then, in 2010, that a two-decade-old Chinese automaker from Zhejiang province managed to acquire an eighty-year-old Swedish brand owned by one of America's most storied carmakers.

Founded in 1986 by Shufu Li, Geely began not as a carmaker but as a manufacturer of refrigerator components, later moving into motorcycles, before entering automobiles in the late 1990s. One of China's first private car companies, it had become a meaningful mass-market player by 2010 but with limited proprietary technology and virtually no global brand recognition. By 2009, Geely was generating only about $2 billion in revenue—roughly one-sixth of Volvo's—prompting some analysts to liken Geely's acquisition of Volvo to a "snake swallowing an elephant." Shufu was unruffled, pointing out that it's "too slow and not easy" to improve capabilities alone; Geely must "find a good partner and teacher, which is Volvo."

The $1.8 billion acquisition in 2010 was a landmark, and even today it remains a reference case of technology transfer and brand stewardship in Chinese outbound M&A. Volvo's strengths—world-class safety engineering, powertrain know-how, and premium brand equity—flowed back into Geely's domestic offerings. The compact modular architecture (CMA) co-developed with Volvo powered the Lynk & Co line and Geely's higher-end models, and also helped move a few others out of the low-end China market.

Equally important was what Geely didn't do. It resisted the urge to impose Chinese systems and left Volvo headquarters, factories, and senior leadership in Sweden intact: Volvo remained Volvo. The payoff came in China. Volvo gained one of its largest and most profitable markets, giving it a boost not possible under Ford leadership. Volvo's sales in China surged from thirty thousand units in 2010 to nearly two hundred thousand units in 2022, cementing China's position as its largest single market worldwide. Geely, meanwhile, gained credibility at home and abroad as a serious automotive player.

The deeper logic of a successful Chinese acquisition is clear: the Chinese owner supplies capital, speed, and access to China's scale; the acquired firm contributes technology, brand awareness, and institutional depth.

Midea's two-track acquisition strategy. Midea's origin story is emblematic of Chinese firms' rise as world-class process learners—and how they're turning those capabilities outward.

Its roots trace back to 1968, when villagers in Beijiao Shunde pooled 5,000 RMB ($714), roughly fifty times rural annual income, to mold plastic caps and glass-bottle parts. Among them was Midea's founder, Xiangjian He. From the company's humble beginnings, it would start producing fans in 1980, air conditioners in 1985, and eventually a full appliance lineup. A Fortune 500 destiny was nowhere yet in sight.

For decades, Midea remained largely invisible behind foreign brands as it optimized for scale rather than identity. By the mid-2010s, that model was running out of steam. Rising labor costs and tighter export conditions meant incremental efficiency gains were no longer enough; Midea needed a step change in capability. It responded by climbing the technology stack—automating production, developing proprietary compressors, building R&D laboratories, and completing more than a dozen strategic acquisitions.

This shift reflected a "two-track" consumer and industrial globalization strategy rooted in a vision Chairman Hongbo Fang traces back to the 1980s, when fierce competition in electric fans made clear that "We must go abroad to explore," he says. On the consumer side, Midea acquired established brands such as Toshiba's home appliances and Teka to gain recognition and distribution in mature markets. On the industrial side, it bought companies such as Israel's Servotronix Motion Control, Italy's Clivet, and Switzerland's Arbonia Climate—signaling its ambition to become a global technology company with worldwide R&D, localized manufacturing, and global talent.

An example of that ambition was Midea's €4.5 billion ($5.2 billion) acquisition of the century-old German robotics icon KUKA in 2016. KUKA was struggling, but its expertise in heavy-duty robotics and motion control offered Midea a fast track to digitalizing its own factories and expanding into industrial robotics—producing not just products but also the machines that make them.

Early integration was uneven. Midea initially tried exporting Chinese management practices to Europe and North America, then reversed course, rebuilding itself as a genuinely global organization with international HR systems, global governance frameworks, and a matrix structure that empowered local teams. "We retained the German management team and encouraged exchanges between German engineers and Chinese factories," says Hongbo.

Globalization also meant building "second-home markets"; after failed attempts to send Chinese managers abroad, Midea shifted to local teams, local decision-making, and local supply chains. Its long-term ambition is to move from contract manufacturing to original brands, targeting half of overseas revenue from self-owned labels. Brand building, Hongbo notes, "cannot be achieved overnight," but Midea now sees itself as a global operator with Chinese roots.

Although the company's many acquired businesses need "long-term nurturing," as Hongbo says, its overseas revenue share surpassed 40 percent in 2024. In sixty years, Midea has grown from a township-based fan maker into a global technology group spanning six major categories. It's also mastering organic expansion—growth from within—by observing and learning first.

The most successful Chinese companies are now growing globally by building for the long term—investing in local factories, logistics, teams, and governance. BYD anchors EV production near customers in Europe and emerging markets; Huawei has built one of the world's largest international R&D networks; TikTok has scaled through regional hubs and local hiring; and Haier has localized its manufacturing ecosystems and empowers local managers.

XPENG shows how this new wave of companies expanding abroad differs from the last. In 2014, founder, Xiaopeng He—fresh from selling mobile internet company UCWeb to Alibaba—saw that "legacy auto companies were being disrupted by software-defined, AI-defined vehicles." Inspired by driving a Tesla, he launched XPENG in Guangzhou to build cars as software on wheels from day one. Models like the G3 and P7 would earn praise for delivering Tesla-level features at lower prices—self-parking, real-time map updates, and in-car voice agents for every passenger.

Europe came next: Norway in 2020, then Denmark, Sweden, and the Netherlands. That path wasn't straightforward. "In the beginning, we wanted to go direct to customers in Europe, but this was really expensive," says vice chairman and president Brian Gu. XPENG pivoted to local partners and dealerships.

To earn trust, XPENG is adopting a "made in Europe, for Europe" model, partnering with Magna Steyr to assemble EVs in Austria and deepening ties with Volkswagen, which took a $700 million minority stake in the company. It also invested heavily in visibility and outreach, for example, supporting elite sporting competitions such as the cycling event Tour of Norway. "We learned the hard way that globalization isn't just logistics; it's legitimacy," Brian says.

We've never seen such urgency to go abroad. Global expansion now headlines nearly every client conversation, with founders increasingly designing for international customers from day one, including gaming, consumer electronics, and premium beverages such as Chagee. An executive from logistics company SF Express summed up the shift in fall 2025: "Three years ago, clients asked how to ship overseas cheaply; two years ago, they asked how to do so faster; today, most already have an overseas hub and ask how to use it to reach more countries."

The reality? Developed markets are lucrative but difficult, while developing markets are more price-sensitive. Southeast Asia feels geographically close but is fragmented, with consumers displaying low willingness to pay across many categories. "After years of trying to figure out Southeast Asian markets, a few have been very successful, but many Chinese players are thinking that only European and US markets will move the needle," says Hai Ye, a McKinsey senior partner leading the growth, marketing, and sales practice. That view, however, is sector-specific. Across categories from smartphones and mining equipment to mobility platforms and consumer apps, growth is coming from an increasingly diverse set of markets—including Southeast Asia, India, the Middle East, Africa, and Latin America.

When outbound companies enter mature markets, regulatory friction often follows, from anti-subsidy probes to strict data and environmental, social, and governance (ESG) regulations. European markets are highly regulated, says Jun Xu, a fintech entrepreneur who co-founded 360 Finance in China and is now building a global digital finance business in Italy. "That makes them tough to enter, which is why we're partnering. In China, we went from zero to IPO within three years. In Europe, it will probably take ten. The upside is, there's a natural barrier to entry, so once we're in, it's less competitive."

The welcome abroad is getting colder. Tariffs, export controls, and industrial policies now dominate trade. China's strength in high-value exports has triggered unease; Asia Society data show China's global favorability has dropped from 43 percent to 29 percent in the decade ending in 2024. Access increasingly depends on the inclinations of local politics, and sentiment can change rapidly.

Chinese firms also risk exporting a "winner-takes-all" mindset that alienates local communities. In solar, aggressive pricing accelerated the green transition but wiped out domestic producers in Europe; by 2025, Germany's Schott Solar, France's Saint-Gobain, and the last major player, Germany's GMB Glasmanufaktur, had all closed down. Similar frictions are surfacing in EVs, batteries, robotics, and e-commerce—where newcomers such as SHEIN and Temu have drawn pushback.

True global firms must invest in communities, hiring locally, reinvesting profits, and building goodwill. As McKinsey senior partner Sheng Hong puts it, "This next generation of Chinese companies has to position themselves as global companies—not simply Chinese ones. The day you're characterized as only a Chinese company you face an uphill battle." Increasingly, that legitimacy is built through highly visible global platforms. Chinese companies have become prominent sponsors of the FIFA World Cup, the Olympic Games, and Formula 1 teams, and are acquiring or stewarding globally recognized sports institutions. These investments signal permanence and partnership, helping Chinese firms embed themselves in local cultural ecosystems in ways that go far beyond advertising.

We've seen these strategies work. Companies such as Midea, Xiaomi, Huawei, Haier, Hisense, and a number of technology and media players have shown that disciplined organic expansion can succeed—if they're willing to adapt not just their products but their posture toward the world.

Simply exporting products doesn't make a company a global multinational. China now accounts for roughly 15 percent of global goods exports—up from about 4 percent in 2000—more than double Germany's share and roughly five times that of Japan or South Korea, three economies where export performance has been a major engine of growth. Yet China's corporate globalization has lagged behind its trade footprint: Chinese A-share listed firms generate only about 11 to 13 percent of their revenue overseas, compared with typically 30 to 60 percent for large German, Japanese, and Korean multinationals. This challenges a common assumption that Chinese firms have long been pure export machines; in reality, for most of the past three decades, domestic growth was large and lucrative enough to dominate strategic focus. Most Chinese firms remain homegrown giants that are dominant at home and tentative abroad.

Brand power lags even further. Global consumers everywhere buy "Made in China" yet struggle to name the companies behind the products. As we mentioned in an earlier chapter, China under-indexes on global brand value, with only two Chinese firms ranking among the top hundred companies with 30 percent of revenue outside their home region. The gap between China's trade footprint and its corporate footprint is both the opportunity and the challenge ahead.

There's no single formula for becoming a true multinational. Large companies expanding abroad face radically different demands than small "born-global" insurgents that simply need a killer product. Here are some lessons that will come in useful:

Be a good corporate citizen. You don't need to win everything!

Replace "China speed" with "global speed."

Become a trusted partner.

Hire great talent, both local and foreign, and embrace a multinational culture.

Build great governance.

Consider a born-global model.

Imagine a Chinese guest arriving in a new neighborhood and being invited to a friendly game of tennis. Once on court, the guest turns up the intensity, wins the first set 6–0 and the second set 6–0, then declares victory. The host offers the obligatory handshake at the net, and both players pack their bags silently—a technically flawless win and a social disaster.

Many Chinese companies new to global markets have played this way. Driven by the same instincts that fueled their domestic rise, they compete aggressively, move fast, and grab share, handing out "bagels"—the "0s" in a 6–0 score. This strategy might work in the short term: customers everywhere love value-for-money products. But rapid scaling and winner-takes-all strategies also trigger defensive reactions from competitors, regulators, and policymakers.

Global success isn't a zero-sum game. You're not just trying to win—you're trying to get invited back to the club. That requires restraint, partnership, and empathy. There has to be enough food on the table for everyone. Sometimes you need to lose a game. Success abroad requires more than technological superiority or operational excellence. It requires corporate citizenship.

Chinese companies will have to learn to be welcomed, not feared, and we're only in the first chapter of this journey. That journey involves investing in local talent, contributing to communities, and aligning with host countries' industrial priorities.

That's easier said than done. Many Chinese executives are competing just as fiercely overseas as they do at home—often against the same rivals—so why change? SHEIN and Temu are suing each other in US courts. Chinese solar suppliers are undercutting each other abroad. To bewildered local executives, it looks as if China's involution has simply been exported. As one Southeast Asian CEO puts it, "Margins are being destroyed, and then Chinese companies turn on each other—we're watching this happen live."

Still, there's hope. Soul Capital founding partner Herry Han sees signs of leading companies "learning to merge cultures, by supporting local hiring, adopting local practices, and even sponsoring the home football team. They're not just selling products."

We've observed tangible investments in local culture and systems, from Huawei-funded labs at German universities, Tencent's backing of European game studios, and experiential brand spaces like NIO House on a prime shopping street in Oslo. NIO's matcha latte went viral; locals came for the drink, then wandered upstairs and asked, "Wait—these cars are Chinese?" Global integration now means being part of the local scene, not just selling into it.

When asked what they wish they'd known before venturing abroad, Chinese executives rarely mention tariffs, hiring, or branding. It's much simpler: "To slow down."

We've discussed "China speed": quickness over precision, instinct over research, entrepreneurship over institutionalization. It works at home because executives negotiate with peers equally obsessed with growth. Experiments are cheap, failure is survivable, and iteration is constant.

Then companies land overseas and everything feels sticky as glue. A Chinese consumer electronics executive tells us, half joking, half exasperated, "We work harder than ever in Europe. Everyone is busy all the time. But nothing moves." Meetings are scheduled weeks out. Partners ask for certifications instead of prototypes. Lawyers replace engineers in early conversations. "In China," he says, "we argue about features. Here, we argue about process."

Outside China, ecosystems are thinner and more fragmented. Suppliers, labs, and distributors aren't clustered in one industrial park—they're spread across cities if not countries. Talent is scarcer, more expensive, and far less tolerant of China-style hours. Regulations aren't flexible guardrails; they're fixed rails. Speed is gated by proof: certifications, warranties, audits, references. This is where "China speed" stalls.

Global success requires a rhythm that is almost the opposite of China's: precision over speed, patience over brute-force iteration, trust-building over trial and error, and compliance as a capability. Why? Experimentation is more expensive. Legal bills pile up quickly. And not least, relationships and reputation matter. A failed pilot can close doors for years. We recommend that clients slow down—so they can ultimately travel faster and farther.

When speed truly matters, Chinese companies should apply it selectively—doubling down on areas of strength such as supply chain, manufacturing, and cost innovation, and targeting specific segments or sub-sectors in terms of sales and branding. Winning one segment first, building customer insight and a local team before expanding, may be less dramatic but far more durable. It shouldn't be a surprise that granularity of growth might be a winning strategy abroad, too.

Of course, when Chinese companies have overwhelming advantages such as digital distribution, massive scale, or network effects, speed still works. Temu in the US, SHEIN in Europe, or Tencent's games in Latin America all expanded rapidly in terms of customer acquisition and growth. Yet even there, success depended as much on earning legitimacy as on "China speed."

Some Chinese conglomerates learned early. WH Group, the world's largest pork producer, is leading in meat and food processing in North America. Early on, it recognized that Asian-style speed wouldn't translate overseas. Instead of pushing volume, WH emphasized patience, investing in local infrastructure, and placing senior Chinese managers at the No. 3 and No. 4 leadership levels into North American operations—not to dictate from the top but to absorb local norms and feed insights back to headquarters. The result was steady growth, operational credibility, and ultimately a successful IPO.

There's irony in this phase of globalization. After China's WTO accession, foreign firms gained access to China largely on one condition: that they partner locally and share valuable know-how. In autos, insurance, and telecoms, those arrangements didn't just open the market, instead they upgraded China's industrial capabilities. Two decades later, the script has flipped. As Chinese companies export not just products but also intellectual property (IP), they're discovering what their former partners discovered years ago: access to foreign markets comes with expectations. In other words, Chinese companies have seen this play out before, only from the other side of the table. Now the question is whether they can become the kind of joint-venture partners they once learned from.

Early signs suggest a handful are doing just that. CATL's €1.8 billion ($2.1 billion) battery plant in Germany pairs manufacturing scale with commitments to local R&D, sustainable sourcing, and workforce development, which aligns neatly with EU industrial priorities. Tsingshan Holding Group, the world's largest nickel producer, has invested more than $10 billion alongside partners to build industrial parks that have created tens of thousands of local jobs and generated significant tax revenues for host governments. Haier's joint venture with Algeria's largest private industrial conglomerate focuses on technology transfer, workforce training, and expanded local production capacity.

Chinese companies are forging a new style abroad. Between 2012 and 2023, the share of local employees hired by Chinese firms overseas rose from less than half to more than 60 percent—a meaningful shift from "ship and sell" to "embed and build." Critically, these partnerships go beyond sharing intellectual property to sharing revenues, risk, and long-term responsibility for local ecosystems. Jason Zhu, CEO of Shanghai-based biotech company Henlius, remarks that the next billion-dollar drug company may well come out of China: "We're on track to introduce great products to the market. But once we do, we need to build overseas supply chains and find foreign partners. We can't let geopolitics get in the way; we have to share."

To achieve win-win outcomes abroad, Chinese firms must move beyond transactional market entry and earn trust as long-term partners—whether through joint ventures, co-development, or deeply integrated supply chain collaboration.

It sounds obvious to say "hire great talent." Yet this is exactly where many Chinese companies stumble. The challenge isn't just attracting talent—it's deciding who leads. In theory, the best executives should run global expansion; in practice, they rarely do. Overseas growth is slow, risky, and often unprofitable for years. For high-performing executives running large domestic units, the trade-off rarely makes sense, especially since overseas businesses are typically tiny to start. "You can't be the hero when you're small," as one executive explains.

That leads to a controversial question: Should overseas businesses be led by Chinese executives or by locals? Many Chinese firms default to sending their own executives abroad. Cultural alignment—sending home-office employees to foreign posts—may feel safer. "We can always hire local executives in functional areas, but the top person must be Chinese," the chairman of a large consumer company insists. "Otherwise, communication and trust become difficult." But the sacrifice is market familiarity: local markets need local leaders. "We've seen multinationals struggle in China. Expatriate leaders just aren't adept at operating locally," says another client. The tension is real and unresolved.

What's clear is that many Chinese executives were never trained for this challenge. "A whole generation only knows how to land grab, Chinese style," says Lambert Bu, a McKinsey senior partner who's been helping Chinese companies in their overseas push. "But succeeding abroad requires a far more scientific understanding of segments and local insights, and different leadership capabilities. Most haven't developed the skills."

Execution failures predictably follow. "We've seen giant Chinese companies send very junior management teams abroad," says Mickey Rocha-Keys, who runs the sports marketing agency EMW Global. "They have great technical skills, but they just don't understand local culture and communities. It's hard for them to build sustainable relationships."

Lenovo remains a benchmark; it deliberately built a multinational leadership team made up of executives from Lenovo, IBM, and industry. Today at Lenovo, the working language is English and its senior leadership operates as a globally integrated team. As Ken Wong, executive vice president and president of its fastest-growing unit, Solutions & Services Group (SSG), puts it, "We are in 183 markets today. We're a true global team and that's what it takes to navigate the world."

In the long run, credibility abroad isn't built by exporting leaders any more than by exporting products. Trust and efficacy come from empowering local leadership, grooming multinational teams, and shedding the posture of a short-term visitor.

Going global forces Chinese companies to reckon with a concept that, at least in the Western sense, has never been their forte: governance. Top-down, first-generation-led Chinese companies are driven by an instinct for speed and competition. Building global structures, by contrast, is far harder. As one client in consumer electronics, long admired for rapid, iterative innovation, puts it, "Governance is not an entrepreneurial instinct. This is the hardest thing we've ever done." Management styles that work in China often fail abroad. "Many Chinese executives assume everything can be centrally decided," notes McKinsey's Lambert. "When things get tough, the answer at home is simply to work harder. That logic doesn't translate in most markets."

Successful globalizers have stopped treating local empowerment as a nice-to-have. TikTok adjusted early: it runs its business through five regional hubs—North America, Europe, the Middle East, Latin America, and Asia-Pacific—each with real decision rights. Lenovo also pushed decision-making closer to local markets. "When Chinese companies go abroad, they must find the right talent, the right strategy, understand the culture, deal with IP and data security. If you don't have strong corporate systems you can't change any of these factors," says Dai Feng, founder of CareCapital Group.

These challenges aren't uniquely Chinese. Many multinationals, after years of global operations, still oscillate between tighter central control and local autonomy. Chinese companies are still experimenting. Early signs suggest that a split structure with one CEO focused on China and another on international markets might feel most natural, as favored by many multinationals with a large domestic base and significant overseas operations. But no model works if it's copied blindly.

Luckin's overseas push shows how tricky the balance can be. After opening up in New York, the company quickly learned it couldn't just export its China playbook; supply chain, equipment, operations, marketing, consumer experience all required localization. "These are not 'ship-the-product' solutions," says David Li, the company's chairman. "We have significant local operations. We need robust oversight—past problems came from governance failures—but we don't want to become a slow-moving organization plagued by bureaucracy."

To balance speed and control, some firms are experimenting with "catfish teams"—small, fast, Chinese units embedded in overseas markets to inject urgency and challenge incumbents without destabilizing the core. "It's the 'catfish in a tank' concept," says Peng Xia, a McKinsey partner in China's digital practice—keeping the system alert, adaptive, and moving.

A new breed is emerging: Chinese firms born with a go-global mindset. Increasingly, Chinese entrepreneurs are building companies designed from the start for international markets. They form English-speaking multinational teams early, develop products with global users in mind, set up operations around the world, and attempt to understand their consumers deeply. Many are consumer-facing businesses with global appeal. Insta360, the action camera maker, and Bambu Lab, in 3D printing, are emblematic, as are China's leading gaming companies and a growing wave of AI start-ups targeting overseas customers from inception. Others, such as Transsion, followed a different but equally telling path; its mobile phones gained traction first in Africa and later in India, while remaining nearly absent from China itself—an inversion of the traditional home-first trajectory.

Structurally, these companies look different from earlier generations. Some even incorporate outside China, often in Singapore, and are attentive students of Western markets and culture. They work across borders naturally and design their organizations to navigate regulatory and geopolitical sensitivities. Consumers sometimes do not know that they are a Chinese company. For these firms, globalization isn't a pivot or a second act—it's the starting point.

Born-global firms internalize a higher baseline for process, documentation, compliance, and product reliability—because selling abroad requires it. They also have executives well-versed in international norms, who were educated overseas, or seasoned abroad. This knowledge of how it works "over there" tends to flow back into China operations. Of course, born-global firms still face the sensitivities of being Chinese companies operating abroad. For this cohort, learning to manage these tensions is a critical part of their operating manual from the start.

We tend to think of multinationals as companies from mature Western economies rather than from Asia—and certainly not from China. Yet every week, Chinese founders are asking about Latin America, the Middle East, Africa, and seeking to meet partners, investors, and regulators there. China Inc. is still early—in "kindergarten," as we like to joke—but learning fast.

The next decade will test whether Chinese firms can evolve from powerful domestic champions into true global citizens. Going global isn't only about scale: it requires cultural maturity, credibility, and a commitment to letting others win, too. Success will hinge on leveraging traditional strengths while building new capabilities to adapt to the slower, more complex dynamics of global markets. Some Chinese firms will remain world-class exporters, succeeding on value alone. But in industries where politics, standards, capital, trust, and narrative matter, value-for-money alone isn't enough. As we sometimes say: you may not be interested in geopolitics, but geopolitics is interested in you.

Ultimately, the question we pose is simple. Why should "multinationals" only describe Coca-Cola, Procter & Gamble, Apple, Volkswagen, LVMH, Sony, and McDonald's? We'd like to see more Chinese firms become true multinationals—global institutions that shape industries, communities, and norms everywhere.

For those who aspire to be global players, it's wise to avoid playing tennis with your new partners without letting them win a few games. Let them taste a little victory and leave everyone wanting to play again. Maybe even go out for a beer afterward and share tips that will raise their game. That's how you get invited back for the next game of tennis, and the one after, until your kids are playing with theirs.