Summary of Key Points
As Chinese enterprises (such as those in the automotive and photovoltaic industries) rapidly expand their overseas operations (with 8.32 million cars exported in 2025 and a global photovoltaic production capacity accounting for over 90%), national policies have shifted from merely assisting them in "going global" (addressing export and investment risks) to focusing on their competitive behavior and compliance efforts in foreign markets. The reason for this change is that, once enterprises become large enough, individual decisions (such as price cuts) are no longer solely their own affairs; they can have significant external consequences for the entire industry and even affect the local industries and policies of the host countries. These issues cannot be resolved by the enterprises alone and require policy intervention to correct misincentives, provide public services, and coordinate cross-border relations, helping Chinese manufacturing to transition from simply selling a large volume to integrating effectively into local markets.
I. Policy Change: From "Helping You Go Out" to "Teaching You How to Compete"
Previous policies mainly addressed the feasibility of entering foreign markets, such as providing export credit (financing for production and exports), credit insurance (to prevent foreign customers from defaulting), and facilitation of customs clearance (to speed up the export process). Now, policies are more detailed and directly involve the competitive aspects of enterprises' overseas operations:
- Automotive industry: There are requirements for clear pricing gradients (e.g., not lowering prices by 10,000 yuan one day and 20,000 yuan the next), and pricing in different countries must take into account taxes and logistics (e.g., not selling for 100,000 yuan in one country and 80,000 yuan in another to avoid dissatisfaction). Additionally, the pricing power of distributors must be respected (e.g., not forcing them to lower prices).
- On a broader scale: In 2025, five government departments will upgrade the "Overseas Comprehensive Service Platform" to integrate legal, fiscal, and intellectual property services, covering the entire process from customer acquisition to after-sales support—essentially providing enterprises with a "global operations manager."
In other words, while previous policies helped enterprises get started, current policies focus on teaching them how to compete effectively in international markets.
II. When Enterprises Grow Large, Price Cuts Are No Longer Local Matters
When Chinese enterprises hold a significant market share overseas, a small action can have a chain reaction:
1. From Price Followers to Price Shapers: For example, if Chinese cars dominate a local new energy market, leading companies' price cuts will force competitors to follow, leading to inventory depreciation for distributors and consumer hesitation (delaying purchases), thus changing the overall market price expectations.
2. External Costs Are Shared by the Entire Industry: For instance, if photovoltaic companies engage in price competition, they may gain orders but see industry-wide profit declines, and they may also face anti-dumping investigations by host countries. Even companies that do not cut prices can be affected (trade restrictions may be imposed on the entire industry).
III. Enterprises Cannot Solve These Issues Alone; Policy Is Needed
There are three main reasons why enterprises cannot handle these issues on their own:
1. Incentive Conflicts: Enterprises often prioritize short-term orders over long-term industry development, reluctant to sacrifice profits for the sake of the industry. For example, although everyone knows that price competition is detrimental, no one wants to be the first to stop, leading to a downward spiral. Policies are needed to establish rules (e.g., banning unfair price cuts) to force companies to consider industry-wide costs.
2. Need for Public Services: Small and medium-sized enterprises cannot afford to establish legal and fiscal teams in every country. The "1+N" platforms created by the government integrate legal databases, intellectual property services, and trade dispute cases, allowing all companies to share resources—like having a global legal department at their disposal.
3. Lack of Cross-Border Coordination: Enterprises cannot control the policies of host countries. For example, the EU, due to a high proportion of low-value Chinese parcels (93% in 2025), may modify regulations (such as increasing taxes or strengthening supervision). Individual companies cannot negotiate with the EU and must rely on government-level communication (e.g., through economic and trade agreements).
IV. Policies Are Not Designed to Restrict Competition but to Fill Gaps
Many worry that policies will restrict free competition, but they actually aim to address shortcomings:
- Correcting External Costs: Policies ensure that corporate decisions account for the industry's shared costs (e.g., considering the potential for anti-dumping actions before cutting prices) rather than only focusing on immediate profits.
- Reducing Operating Costs: Shared service platforms save companies from duplicating efforts (e.g., eliminating the need for each company to establish its own overseas legal team).
- Solving Cross-Border Challenges: Governments use macro data (e.g., capacity saturation or trade policy risks) to guide corporate strategies, preventing overcrowding and local backlash. For example, price guidelines in automotive policies are not meant to prevent price cuts but to ensure they are reasonable and sustainable for both the industry and local markets.
V. The New Challenge for Chinese Manufacturing: From "Efficiency First" to "Integration"
Previously, Chinese manufacturing relied on efficient supply chains (low cost, fast delivery) to succeed. Now, with increased scale, the focus is on how to integrate into local markets:
- Consider Local Interests: Companies must take into account the interests of local distributors and respect their pricing power.
- Account for Local Costs: Pricing must consider local taxes and logistics.
- Consider the Whole Picture: Beyond orders, companies must also consider local industries and employment to avoid triggering protectionism.
In other words, while Chinese manufacturing was once about selling products efficiently, it now needs to become an integral part of local markets to establish a lasting presence overseas.
**In conclusion, Chinese manufacturing has moved from "going global" to "integrating into global markets." Policy changes are aimed at helping Chinese companies not only sell more but also operate effectively in these markets.