Author: Lanjing News
Throughout history, every time humanity stepped out from familiar lands and sailed into the open ocean, it has been an ode to courage. And the rewards of courage have never disappointed the pioneers.
As early as before the 15th century, Venetian merchants had extended their trade tentacles to every port in the Mediterranean. The arrival of the Age of Exploration saw countless adventurers, filled with ambition for conquest and a thirst for wealth, set sail for uncharted waters, expanding the web of trade to the New World. An era of great geographical discoveries thus redrew the world map.
Today, venturing overseas to tap new markets has become a new growth engine for leading Chinese companies. Moving from product export towards high-value creation, Chinese enterprises are continuously expanding their frontiers, ushering in their own "Age of Great Navigation."
Against this backdrop, Invesco Great Wall Fund officially released the report titled "The 'Age of Great Navigation' for Chinese Enterprises — Outlook on New Trends and Investment Opportunities for Chinese Enterprises Going Global in 2026" (hereinafter referred to as the "Report"). The Report provides an in-depth interpretation of the new trends in Chinese enterprises' global expansion under the new normal of global industrial chain restructuring, offering a panoramic view of investment opportunities in the new era of going global, ranging from consumer goods to capital goods.
Several fund managers from Invesco Great Wall — Ke Haidong, Zhou Hanying, Qiao Haiying, Guo Lin, Xu Yida, and Wang Kaizhan — systematically analyzed the investment opportunities hidden within the new trends of going global, focusing on core viewpoints of the Report. They addressed aspects such as the foundation of Chinese enterprises' global expansion, whether the logic of going global will become a long-term trend in A-share investment, and specific investment directions worthy of attention, helping investors understand the investment logic behind this wave of overseas expansion.
Publishing in-depth research reports has become one of the key formats for the investment research team at Invesco Great Wall Fund to deeply communicate with the market and investors. From the "New Energy Vehicle Insight Report" in 2022, to the "Technology Insight Series: Semiconductors" in 2023, and the "Reshape·Insight AI+" released in 2024, their investment research team has consistently captured industrial investment opportunities with a forward-looking vision, sending clear "strong call" signals to the market. This year, this overseas expansion report adopts a more macro perspective and broader vision, combining with the era's theme of "going global" to deeply analyze industrial trends and investment opportunities. It continues the consistent lineage of Invesco Great Wall's investment research while also standing at a new point in time, demonstrating insight and grasp of major trends of the era.
When Going Global Becomes the New Normal for Enterprises
Over the past two years, a magnificent wave of overseas expansion trends has swept through the Chinese capital market. From trendy consumer toys taking the world by storm to the explosive growth of innovative drug business development (BD), and the stunning tenfold performance of leading optical module companies — these industries vary greatly, but "going global" has become the common keyword.
More importantly, at the listed company level, going global has transitioned from past "storytelling" to tangible profits and positive valuation feedback. Overseas business brings higher gross profit margins, combined with vast overseas growth potential, collectively boosting ROE levels. Companies with a high proportion of overseas revenue on the A-share market enjoy significant valuation premiums.
All of this points to one conclusion: Going global is becoming the new normal for Chinese enterprises.
Why has going global become so crucial today? Ke Haidong, Fund Manager of the Equity Investment Department at Invesco Great Wall, analyzes from a macro perspective: Against the backdrop of major power rivalry, enterprises going global is an important lever for China to break through blockades and reshape the global landscape. At the national level, there is a strong push to jointly build the "Belt and Road" with many countries in Africa, Latin America, and Southeast Asia, and enterprises are following this policy momentum to invest overseas.
From a micro perspective, going global is no longer an "option" for enterprises, but a "necessity." Zhou Hanying, Fund Manager of the International Investment Department at Invesco Great Wall, points out: "Going global is not a choice for enterprises, but an inevitability for survival and leapfrogging."
She summarizes three reasons:
- First, realistic factors: Even after the U.S. launched tariff wars in 2018 and 2025, China's exports continued to grow, indicating that the world cannot do without Chinese manufacturing.
- Second, profit migration: Overseas gross profit margins for A-share companies going global are as high as 28%, significantly higher than the 19.2% domestically. Going global means enhancing profitability and valuation.
- Third, historical validation: Leading companies in U.S. and Japanese markets, like Toyota and Johnson & Johnson, derive 60% of their profits from overseas, driving their long-term bull markets. Currently, overseas revenue accounts for only 15% of A-shares, indicating immense room for growth.
Ke Haidong asserts: "The trend of going global is not a flash in the pan but can last a very long time and will permeate all aspects of A-share investment." For investors, understanding this new normal of going global is key to understanding the core narrative of the Chinese capital market in the coming decade.
The Version Iteration of Going Global: From "Product" to "Service"
Chinese enterprises' global expansion did not begin today. As early as after joining the WTO in 2001, Chinese enterprises began to go global in the form of "product export."
The model at that time was: enterprises shipped products from Chinese factories overseas, handing them over to importers or distributors. Subsequent brand building, channel management, and after-sales service were almost entirely out of Chinese enterprises' "hands." Under this model, Chinese companies played the role of pure "manufacturing factories," earning processing fees and occupying the mid-to-low end of the global value chain. Although the scale was large, profits were thin, and control over overseas markets was minimal.
After the U.S. initiated the first round of the tariff war in 2018, Chinese enterprises began to accelerate the first wave of going global. Companies faced a critical decision: either bear the cost increases from tariffs or set up factories overseas to circumvent them. After calculations, many chose the latter.
Ke Haidong analyzes that the first step in going global is production capacity layout. From listed companies' announcements, it is clear that after 2018, the number of capacity expansions overseas, in industries like construction, continued to grow significantly. This wave can be regarded as "Going Global 1.0": enterprises began to locate production capacity overseas, but more as a passive response to trade frictions.
The qualitative change occurred in 2025. With the U.S. escalating the tariff war again in 2025, and trade frictions emerging from Europe and other countries as well, Chinese enterprises entered the era of "Going Global 2.0" facing a more complex international trade environment.
The core feature of this version is: "Transforming from export towards going global; export is merely simple product export, while going global, besides products, includes the overseas layout of operational capabilities and production capacity."
Going Global 2.0 is specifically reflected in several changes:
- First, high-speed growth in capital goods investment, particularly focused on "Belt and Road" markets, driven by Chinese enterprises' overseas production capacity backups.
- Second, consumer goods going global, gradually expanding from online brand and momentum accumulation to offline channels.
- Third, accelerated service industry globalization. On one hand, visa-exempt entries of foreigners grew by 50% in 2025; on the other hand, innovative drug BD and large model Token exports became new trends.
- Fourth, supply chain globalization is deeply intertwined with the AI revolution, with Chinese enterprises embedding themselves into the core supply chains of global tech giants.
The Advantages of Chinese Enterprises in Going Global
The powerful global competitiveness displayed by Chinese enterprises in the Going Global 2.0 era is underpinned by a complete set of systematic advantages. Invesco Great Wall Fund expressed full confidence in the sustainability and growth potential of going global. These advantages for Chinese enterprises going global are not a single factor but an overlay of multiple dividends, forming a competitive moat that is difficult to replicate.
First, the engineer dividend is the core factor driving the development of China's manufacturing and technology industries. The number of science and engineering bachelor's graduates in China has continued to grow significantly since 2000, with over 3 million new graduates annually. These high-quality STEM talents drive the continuous improvement of Chinese enterprises' R&D capabilities.
Second, well-developed and low-cost infrastructure provides a solid foundation for manufacturing development. China's industrial electricity prices are far lower than those of developed countries in Europe and America, with extremely high power supply reliability. In logistics, China possesses the world's densest network of highways, high-speed railways, and ports, significantly reducing logistics costs for raw material input and product output. These infrastructure advantages result from decades of sustained investment and are difficult for other countries to catch up with in the short term.
Finally, the cluster effect of a complete industrial chain. China's manufacturing value-added leads the world by a wide margin, with exports of capital goods, intermediate goods, and consumer goods all occupying top global positions.
Guo Lin, Fund Manager of the Research Department at Invesco Great Wall, uses optical modules as an example. In the AI era, "speed is paramount." Once a technical solution emerges, Chinese enterprise engineers quickly advance yield ramp-up and capacity expansion, while overseas competitors are at a clear disadvantage in response speed. Simultaneously, leading optical module companies have established production bases overseas, achieving a transnational architecture of Chinese R&D, overseas manufacturing, and global delivery, perfectly circumventing certain trade barriers.
Qiao Haiying, Fund Manager of the Equity Investment Department at Invesco Great Wall, uses innovative drugs as an example: Chinese pharmaceutical companies are gradually replacing their overseas counterparts as the preferred choice for multinational pharmaceutical companies to introduce pipelines. Policy-wise, domestic drug regulatory agencies' approval efficiency is globally leading, laying a solid foundation for R&D. Talent-wise, leveraging the engineer dividend, China has the world's largest and most cost-effective group of biomedical engineers, with world-class speed in preclinical development and iteration. Industrial chain-wise, the vast disease population and concentrated medical resources enable clinical trial enrollment speeds to reach 30%–40% of the global average, with costs only one-third to one-quarter. The synergy of these three creates Chinese pharmaceutical companies' unparalleled capability for low-cost, rapid trial-and-error globally.
Selling Shovels to the World — Opportunities in Capital Goods Going Global
In the process of enterprises going global, "shovel sellers" become one of the biggest beneficiaries. Capital goods (construction machinery, heavy trucks, etc.) play precisely this "shovel seller" role. So, what opportunities do Chinese enterprises face in the capital goods sector?
Wang Kaizhan, Fund Manager of the Research Department at Invesco Great Wall, points out that over the past two to three decades, especially during the real estate boom cycle, demand for capital goods like construction machinery and heavy trucks was created. More importantly, China formed a complete industrial chain cluster from raw materials to components to finished products. Although the real estate cycle has subsided, overseas demand, particularly from the AI investment wave, has taken over the baton. Chinese enterprises are rapidly moving into "Belt and Road" emerging markets and developed countries in Europe and America, making solid progress in overseas localization operations.
Xu Yida, Fund Manager of the Equity Investment Department at Invesco Great Wall, adds that Chinese manufacturing has accumulated the world's most complete industrial supply chain, low-cost infrastructure and energy, and a rich engineer dividend. This high-quality supply highly matches the current round of global demand, giving rise to the prosperity of capital goods going global.
Wang Kaizhan observes that over the past few years, global mining companies have engaged in numerous mergers, acquisitions, and new project constructions, bringing the Chinese supply chain into previously hard-to-enter markets. The localization rate in areas like large mining trucks and large excavators has rapidly increased. The growth momentum for the domestic construction machinery industry largely comes from overseas, with new mining projects in resource-rich countries becoming the core driver.
Furthermore, the increase in market share for China's construction machinery relies not solely on technological generation gaps. Wang Kaizhan believes the real advantages lie in the cost side — the integrated cost advantage from full industrial chain integration — and the service side — the rapid response capability brought by the engineer dividend. Solving technical issues might take foreign brands weeks, whereas domestic brands require only days.
Xu Yida observes that in emerging economies like the "Belt and Road," Chinese capital goods are quickly capturing market share based on technical barriers and practical assistance. However, in traditional regions deeply cultivated by European and American giants like South America and Australia, entry still requires time.
Wang Kaizhan believes that as enterprises no longer just focus on manufacturing and processing but go global with their brands and sales systems, profitability naturally rises; simultaneously, the undervaluation of the RMB exchange rate provides a systemic dividend. Xu Yida adds that domestic high-quality leaders face a more relaxed competitive environment overseas, enabling them to gain higher pricing power while spreading R&D costs.
The journey of selling shovels to the world for Chinese capital goods has only just begun. Looking ahead 1-2 years, Wang Kaizhan believes the sectors with the highest growth momentum are LNG main engine manufacturers, power grid distribution equipment, energy storage projects, and transformers. With tight production capacity in Europe and America, Chinese enterprises are leveraging this opportunity to open up solidified market structures.
Xu Yida prioritizes power equipment and construction machinery. He believes, drawing from Japan's past experience in going global, priority should be given to areas where China possesses significant advantages. Chinese power equipment companies have global competitiveness in technology, cost, and delivery speed and are expected to deeply benefit from this round of overseas power grid upgrade cycles.
Regarding construction machinery, leading Chinese enterprises are already among the top globally, with clear long-term competitiveness. Currently, the global construction machinery industry is in an upward cycle, expected to last for a considerable period. However, the current global market share of Chinese enterprises remains relatively low, with significant room for future growth. With the acceleration of industrialization in "Belt and Road" countries and robust demand for resource extraction, the overseas expansion of construction machinery has stable demand support.
What Other Investment Opportunities Exist in Going Global?
Based on global competitive dynamics and China's industrial upgrade logic, Guo Lin points out that new energy vehicles, AI applications, and optical modules are becoming core tracks for "extreme globalization," containing non-linear growth opportunities.
Over the past five years, China's new energy vehicle industry developed rapidly, leveraging policy dividends, the three-electricity (battery, motor, electronic control) industry chain, and cost advantages. However, high tariffs in Europe and America are forcing industry transformation. The future key to success lies in overseas local factory construction and supply chain establishment. Leading automakers, leveraging hybrid technology, have seen their monthly export share exceed 40%, confirming the feasibility of localization.
Guo Lin is optimistic about AI application globalization and optical module companies, including large models/Tokens, cloud services, robotics, and vertical Agents. Overseas Coding applications have already replaced many programmers, reaching a critical point of explosion. China possesses a vast population base and application development experience, potentially replicating domestic success models to achieve overseas leaps. Optical module companies have demonstrated extreme competitiveness in this AI computing power explosion, with leading companies entering Nvidia's supply chain. This competitiveness can be replicated in areas like PCBs, consumer electronics, automobiles, and power equipment.
Zhou Hanying is optimistic about two major directions: AI-driven power and grid equipment globalization and consumer brand globalization, relying on the global power grid investment gap and Chinese brand upgrade dividends, respectively.
The endgame of AI is power. Energy storage and power electronics will become core components of AI infrastructure. As global power grid investment rises, the AI computing power cycle drives segments like high-voltage switches, HVDC, energy storage, and microgrids, which combine global gaps and entry barriers, resulting in a high probability of successful globalization. Consumer globalization is shifting from cost advantage to brand power. On one hand, Chinese supply chain efficiency brings "chain-to-price ratio" advantages. On the other hand, "branded quality-to-price ratio" with high perceived value achieves price increases in Europe and America through IP and design, such as trendy toy brands priced at $20-30, avoiding low-price competition.
Qiao Haiying believes that in the innovative drug field, investment opportunities for ten-bagger stocks have already emerged. Taking oncology drugs as an example, the previous generation "drug king" had global annual sales of around $30 billion. The next-generation drugs, after iteration, have reached the $100 billion level in annual sales, significantly expanding the market space. In this process, Chinese pharmaceutical companies in oncology have already produced three opportunities with near-tenfold growth potential.
More importantly, the treatment areas of innovative drugs are expanding from mere disease treatment to consumer healthcare. Large indications nurture large products, and large products create large companies. Taking the weight loss field as an example, this track already possesses the conditions to give birth to ten-bagger companies, potentially more than one. This continuous expansion of treatment boundaries brings us highly attractive investment opportunities, which we firmly believe in.
Of course, the path of going global is filled with both opportunities and challenges. Chinese enterprises face multiple obstacles such as geopolitical risks, local compliance, cultural barriers, exchange rate fluctuations, single channels, technology blockades, and trust barriers.
In response, Zhou Hanying proposes a framework of "pre-compliance, local production, local spokespersons." Qiao Haiying emphasizes the necessity of building overseas clinical and commercialization capabilities. Xu Yida believes that, given time, Chinese leaders will ultimately break through trust barriers. Only those enterprises that can identify risks, sustain investment, and respond effectively will ultimately emerge victorious in this new wave of globalization.
