(Yicai) Dec. 2 -- Chinese companies expanding overseas must strengthen the construction of global supply chains and especially their ability to produce and sell locally, also known as ‘Local for Local,’ in order to overcome growing geopolitical uncertainty, the secretary of the Board of Directors at the Chinese integrated device manufacturer for semiconductors said recently.

Chinese companies in overseas markets must not only be competitive in terms of market share, cost and efficiency, but they also need to meet the higher standards of international customers in terms of sustainable development as well as environmental, social and governance requirements, Gao Yu said at the China Financial Value Ranking Summit held by Yicai last week.

They need to provide clients with a range of solutions and services, said Gao. Wingtech’s products can be found in automobiles, electricity, computers, as well as wearable devices. The Jiaxing-based firm earned 88 percent of its revenue from overseas markets in 2023.

Jinko Power Technology always sets up a local team to carry out its business overseas, said Sun Yibo, vice president of international investment and financing at the new energy power station developer under solar giant Jinko Solar. Although the final decisions are still made by the firm’s headquarters in Shanghai, the company relies entirely on local managers to promote the development of and find investment for new projects.

Jinko Power earned around 5 percent of its revenue from overseas markets last year. The company has 3.4 gigawatts of projects under construction or in the planning stage abroad, according to its latest annual report and website.

Jinko Power emphasizes respect for local cultures, laws and market rules when it expands abroad, Sun said. It does not directly apply its way of doing things in China in other countries, and makes adjustments based on local conditions.

Chinese firms should adopt a diversified strategy to deal with uncertainties, such as diversifying their partners, financial channels and instruments as well as hedging, Sun said. In this way they can reduce political and market risks and cope better with exchange and interest rate fluctuations.

In the face of a strengthening US dollar and possible additional US tariffs, Chinese companies going global should raise funds in Chinese yuan and choose the redback as their payment currency to offset foreign exchange fluctuations and reduce financing costs, said Albert Yuan, president of the United Overseas Bank’s Shanghai branch and head of transaction banking in mainland China and Hong Kong.

They should also link arms with local banks with strong local resources, Yuan said. For example, the UOB can provide all-round support for Chinese enterprises investing in Southeast Asia, thanks to the Singapore-based lender’s deep roots in Southeast Asian countries such as Thailand, Malaysia and Indonesia. This includes financing, supply chain management and the building of dealer networks.

Editors: Tang Shihua, Kim Taylor