Professor Shipeng Yan, 蔡益書, and 楊海濱
27 August 2025
Amid the current vicissitudes of globalization and the profound shifts in the global environment, Chinese enterprises’ international expansion strategies are beset with challenges. Their erstwhile strategies succeeded for the straightforward reason that close political ties with the upper echelons of host-country governments readily secured access to resources, markets, and policy incentives. With tense geopolitics and the rise of protectionism, Chinese companies reliant on a “government-oriented” internationalization strategy confront unprecedented challenges. Sustaining their growth abroad depends on how quickly these challenges can be addressed.
While economic, political, and social factors are regarded as the three driving forces of historical progress, social factors are often overlooked by Chinese businesses. Once a host government gradually morphs from a reliable partner into a volatile risk factor, these companies must adjust their overseas expansion strategies accordingly and establish deep connections with the local community. Such a strategic transformation anchored in close engagement with grassroots communities is set to become a vital channel for companies to gain a market foothold, hedge against political risks, and safeguard their autonomy.
Strategic breakout to cement grassroots ties
Building connections with the local community at grassroots level, with cultural integration at the core of the marketing strategy, promotes positive interaction between enterprises, community leaders, non-governmental organizations, and the general public. This approach will enable businesses to gain social recognition and obtain precise market insights essential to their operations, which could help mitigate policy risks and market resistance. Traditionally, the investment projects of Chinese companies in Africa have depended on political protection rooted in relations between national governments and agreements reached at senior levels. Such an investment model may have been instrumental in facilitating rapid investment growth, but the lack of engagement with local grassroots communities has left investment projects mired in constant social conflicts. For example, in the Kenyan archipelago of Lamu, a proposed Chinese-funded coal power plant could have served as a showcase project of the Belt and Road Initiative in Eastern Africa. However, following a legal dispute triggered by the company’s failure to address inhabitants’ concerns over threats to the local ecosystem and fishing livelihoods, the court ruled that the project violated community interests and environmental regulations, resulting in its termination (see Note 1).
On the contrary, by proactively integrating with local culture, Shenzhen Transsion has accurately addressed user needs and has consequently delivered remarkable performance. For instance, in response to the persistent problem of inadequate power supply in Africa, the company launched ultra-long-standby smartphones to meet this common challenge. The selfie algorithms in its smartphones have been optimized to suit the skin tones of African users. Alongside its dedicated sponsorship of local music and sports events, the company has developed a comprehensive after-sales service network, thereby strengthening its emotional bond with consumers. As of 2023, Shenzhen Transsion secured 40% of the African smartphone market and 8.1% of the global market , while its smartphone shipments reached nearly 194 million units (see Note 2).
Other brands such as Xiaomi, OPPO, and Realme have followed suit, adopting a similarly grassroots-oriented strategy. Leveraging its down-to-earth strategy plus the cultivation of a “fans economy”, Xiaomi registered a sales growth of 22% in 2024. This illustrates that the cultural integration model has become a core element of Chinese businesses’ entry into the African market. For these companies, the ability to satisfy both the material and cultural needs of local communities can pave the way for growth in the increasingly complex international arena (see Note 3).
Towards a league of common interests
Building ties with local grassroots communities is essentially tantamount to forming a union of interests. Through such initiatives as collaborative community development, companies can enhance their legitimacy in host locations, constituting an effective hedge against political risks. According to an article recently published in the Administrative Science Quarterly, companies heavily dependent on specific political forces are more vulnerable to severe disruption during political turmoil and regime change, or may even become the sacrificial lamb in political power struggles. On the contrary, creating a union of shared interests with the local community is a sound hedge against such risks. This is best pursued through collaborative community development and corporate social responsibility (see Note 4).
In times of instability, staking a company’s future on a single political power is no different from gambling. For example, a Chinese mining investment project in Zambia ended up in violence following a labour dispute, highlighting the risks of pinning corporate ambitions on government backing. Given its relatively weak governance capacity, Zambia is unlikely to be able to afford adequate protection for business operations within the local community. These conditions may even entangle foreign companies in intense political struggles. In a bid to attack the ruling government, Miles Sampa, president of the opposition Patriotic Front, has accused Chinese companies of “exploiting local labour”, drawing them into a political maelstrom (see Note 5).
As noted in an international business study on the Arab Spring in Lybia, subsequent to the toppling of the Gaddafi government, multinationals were able to survive only by taking the initiative to invest in public welfare projects and by building networks of connections with local families (see Note 6).
In fact, collaborative community building also aligns with the development priorities of local governments, enabling foreign companies to indirectly foster safe and stable political relationships (see Note 7). After the acquisition of the Las Bambas copper mine in Peru by a Chinese company in 2014, land acquisition and environmental concerns led to multiple road blockages to the mine by local community groups. From 2020 onwards, frequent regime changes in the country and the occupation of the mine by local community groups in 2022 culminated in the eventual closure of Las Bambas, which had an annual production value of US$3 billion (see Note 8). The Peruvian government has recently urged Chinese enterprises to scale up investment in infrastructure and livelihood projects around the mine, including the construction of roads and schools to meet the development needs of the local community. Apart from strengthening direct communication with the local community, Chinese companies have also taken the initiative to engage local agencies in environmental evaluations and have increased their investment in infrastructure development (see Note 9). This approach not only addresses local community demands but also meets the expectations of both the ruling and opposition parties. By mitigating political risks, it helps to ensure the sustained operation of projects.
Turning the tables with grassroots support
Without a doubt, a public opinion mobilization strategy can serve to counter policy uncertainty in the host country. By engaging grassroots groups in broad participation, enterprises can reshape the public opinion landscape, seize the initiative in public discourse, shift their role in the political arena from passive to active, and set the public agenda. TikTok is an exemplary case in this regard. Subject to pressure and the potential ban by the US government citing national security concerns since 2020, and in addition to political lobbying, the company has―with the support of its American user groups, especially young people and content creators―rapidly gained an advantageous position in the public opinion arena. For example, the hashtag “#SaveTikTok” once became a trending topic on social media platforms and garnered substantial public support. TikTok also actively cooperated with non-governmental organizations, such as the American Civil Liberties Union, to challenge the US government’s executive order by leveraging the weight of public opinion to exert pressure on the state.
Moreover, in the European market, Huawei and Hikvision are gradually mobilizing public consensus and support through dialogue with policymakers on public forums and social media, in order to withstand political and regulatory pressures. Such grassroots sentiment has become a key strategy for Chinese companies to shape public opinion in the market and safeguard their room for international survival in the new phase of global competition.
Opportunities to transform the enhanced market linkage strategy
As a more sustainable strategy, grassroots engagement is preferable to top-down directives. The strategic changes described above mark a brand-new phase in the overseas expansion of Chinese companies, defined by deep integration with local communities to seize the strategic initiative. While elite diplomacy and government relations can pave the way for business internationalization, as a result of the volatility of global politics, excessive reliance on the “upper-echelon approach” inevitably entails huge risks. More often than not, how far companies can go in overseas markets hinges on the extent to which they integrate with the host country’s local communities.
Some scholars refer to the post-2020 period as the “3.0 era” of Chinese enterprises’ overseas expansion. In other words, Chinese businesses are no longer satisfied with simply exporting goods or undertaking merger and acquisition activities. Instead, they are striving to build symbiotic ecosystems with host countries and to realize a strategic shift from “going out” to “going in”. They are now strategically repositioning themselves, moving beyond the role of traditional market participants to become members of local communities and partners in development. Against the backdrop of geopolitical and regional upheavals, coupled with recurrent backlash against globalization, this “grassroots breakout” model is poised to give Chinese enterprises greater resilience and risk-management capacity, leading to a more stable and sustainable future.
Note 2：https://www.fdsm.fudan.edu.cn/nwmba/2025/0520/c256a11111/page.htm
Note 3：https://tech.ifeng.com/c/8irZqSVVZh2
Note 4：https://doi.org/10.1177/00018392241307852
Note 6：https://doi.org/10.1057/jibs.2015.27
