The customs policy of US President Donald Trump is aimed not only at regulating the sphere of foreign trade, but also at localizing the production of many goods in the country. The Chinese authorities, having realized the consequences of increasing customs duties, began to push large manufacturers to expand their presence in other countries.
Image source: Lenovo
At least, as Nikkei Asian Review reports, the Chinese government is encouraging major Chinese companies with state support to set up manufacturing operations in Southeast Asia, Europe and the Middle East. These measures are aimed at reducing the impact of U.S. import tariffs that are set to be imposed on products from China. Display maker BOE Technology and the world’s largest PC maker Lenovo Group have already shown a willingness to expand their presence outside China to offset the impact of U.S. import tariffs.
Against this backdrop, BOE is even considering investing in the capital of Hong Kong-based display and TV equipment manufacturer TPV, which has production facilities in Latin America and Europe. BOE is also prepared to take over some European monitor and display manufacturers if necessary. In the segment of displays using “electronic ink” technology, BOE considers the European market to be a priority. According to sources, BOE’s plans have not yet been finalized.
According to some reports, the Chinese authorities prohibit local companies from investing heavily in the production of LCD panels as such outside the country, but welcome the idea of organizing operations abroad for the assembly and testing of finished products. This allows not only to limit the export of technologies, but also to more quickly organize the release of products closer to the final sales markets.
Lenovo created a working group this year that is focused on expanding its business outside of China and the US – in Europe, for example. The company plans to launch laptop and desktop PC production in Saudi Arabia in 2026. Having such a site will allow Lenovo to serve not only the US market, but also Africa, Europe and the Middle East.
Chinese TV makers are also looking to reduce their reliance on Mexico, as the U.S. president has been less than welcoming of imports from its southern neighbor. TCL, for example, has been investing heavily in Vietnam in recent years. However, some Chinese display makers are trying to keep a low profile and watch the political developments, which are moving quickly and sometimes controversially.
Chinese automakers are forced to develop foreign markets due to the highest competition in their home market, many of them are aiming to organize the production of vehicles not only in Europe and Latin America, but also in the countries of Oceania, the Middle East and Africa. Even if there is a thaw in the “trade war” between the US and China, Chinese companies will seek to strengthen their presence outside their home market. Foreign investments by Chinese companies have been growing in recent years, reaching $162.8 billion last year. In recent years, large sums have been spent on developing production outside China by companies producing traction batteries and electric vehicles. At the same time, deals to absorb foreign businesses by China have noticeably decreased in number and amount. For China, in the context of increasing tensions in relations with the US, it is becoming important to maintain good relations with Europe.