Chinese tech and retail giants are increasingly looking beyond their borders as heightened competition and stringent domestic regulations put a squeeze on growth. Ernan Cui, a consumer analyst at Gavekal Dragonomics in Beijing, told the NYT that the “golden time for Meituan’s food delivery business in China may be over,” citing regulatory pressures and intense competition as factors “adding pressure” on the company.
In a significant move, Meituan, China’s largest food delivery platform, announced in May its plan to invest $1 billion to launch operations in Brazil. This substantial investment underscores the company’s commitment to securing a foothold in the South American nation.
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Similarly, Mixue, a prominent Chinese multinational fast-food chain, has revealed plans to hire thousands of employees in Brazil. Meanwhile, Temu, a popular Chinese online shopping platform, began selling products in Brazil in June 2024, further expanding the reach of Chinese e-commerce in the region.
These expansions come as Chinese companies grapple with the impact of recent U.S. policy changes, such as the Trump administration’s decision in May to end a tariff loophole that allowed certain packages valued at $800 or less from China to enter the U.S. duty-free. This change has particularly affected major Chinese e-commerce sites like Temu and Shein.
Trade Tensions and Growth Imperatives Drive Overseas Expansion
The ongoing trade tensions with the United States, including tariffs imposed by President Donald Trump on Chinese goods, are a significant catalyst for this outward expansion. “Chinese companies are finding it harder to grow domestically,” Vey-Sern Ling, an equities adviser in Singapore at the private bank Union Bancaire Privée, explained to the NYT. Ling added that “exports and overseas expansion is one way to support continued growth.”
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Beyond individual company initiatives, there’s a broader strategic effort. In May, Chinese companies collectively pledged approximately $4.7 billion in investments in Brazil, targeting sectors such as expanded automotive manufacturing and renewable energy. Chinese automakers, in particular, have reportedly vowed to build new factories in Brazil, according to Reuters.
The geopolitical significance of Brazil to China was highlighted in May when Chinese President Xi Jinping held a meeting with Latin American leaders, including Brazilian President Luiz Inácio Lula da Silva. This high-level engagement signals China’s strategic interest in strengthening economic ties with the region.
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Heatherm Huang, a co-founder of Measurable A.I., a Hong Kong-based tech company that analyzes online shopping data for financial firms, offered an insightful perspective to the NYT on the long-term goals of these Chinese enterprises.
“When the Chinese companies go abroad, making money is the secondary priority — they want to dominate the market first,” Huang stated, suggesting a broader ambition beyond immediate profitability.
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