Introduction
Over the past decade, the world has witnessed a remarkable shift: more and more Chinese companies are moving parts of their operations overseas. Once known as “the world’s factory,” China is now exporting not only products but also production lines, with manufacturers establishing plants in Brazil, Thailand, Indonesia, and beyond.
Why is this happening? The numbers tell the story. Chinese outward foreign direct investment (FDI) has surged to over $130 billion annually, making China one of the largest investors worldwide. In Southeast Asia alone, Chinese firms have built hundreds of new factories, while Africa and Latin America are seeing record levels of Chinese-backed industrial parks.
For businesses worldwide, this “China Overseas” trend is more than just headlines, it signals a profound transformation in global supply chains. Understanding why companies are making this move, and where they are going, is essential for any firm that wants to remain competitive in today’s globalized marketplace.
What is China Plus One Sourcing Model?
China Plus One Sourcing is a global procurement strategy that CAMAL Group actively uses to help clients access the best products from leading Chinese manufacturers. Rather than relying only on production within mainland China, buyers can work with Chinese suppliers while also leveraging production and shipping from other countries.
In many cases, discussions begin with factory owners in China, but final procurement and shipment may be arranged outside of China.
This approach allows buyers to:
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- Optimize supply chains by sourcing from suppliers closer to the destination market
- Reduce exposure to tariffs and trade restrictions targeting mainland China
- Diversify and localize supply by going beyond a single country
- Benefit from China’s fast manufacturing upgrades while balancing global sourcing needs
In this blog, we’ll explore the key commercial and regulatory drivers behind this shift, share real-world examples of Chinese companies that have expanded abroad, and highlight how CAMAL is helping international businesses adapt and thrive under the China Plus One model.
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Commercial and Regulatory Drivers of “China Overseas” Shifts
Stricter Regulations in China
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- Environmental, labor, and safety requirements are tightening in China.
- Many manufacturers look abroad for more flexible environments that allow faster project approvals and lower compliance costs.
Stricter safety and environmental regulations in China are driving manufacturers to explore overseas options with lower compliance costs
Trade Barriers and Geopolitical Tensions
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- Tariffs and sanctions from the U.S. and Europe have pushed firms to set up overseas plants.
- Example: Geely building electric vehicle plants in Southeast Asia to bypass tariffs and access local markets.
Rising Labor and Production Costs
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- Chinese wages have risen sharply over the last decade, eroding its “low-cost factory” advantage.
- Manufacturers are relocating to Vietnam, Thailand, and Indonesia, where costs are 30–50% lower.
Need for Market Access and Localization
Producing close to customers helps reduce tariffs and improve service. XCMG in Brazil and Hangcha in Thailand are clear cases of companies embedding themselves in local markets. Localization also allows for products tailored to regional needs.
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Vietnam offers labor costs up to 50% lower than China, helping manufacturers maintain competitiveness while staying close to Asian supply chains
Hangcha’s investment in Thailand shows how Chinese firms use ASEAN hubs to cut costs, avoid tariffs, and serve local demand.
Diversification and Risk Management
The “China plus one” strategy is now common among manufacturers. By spreading production across several countries, firms protect themselves from supply chain shocks. Foxconn, Great Wall Motors, and SAIC-GM-Wuling have all adopted this diversified approach.
CAMAL Case Study—Chinese Construction Partner
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- CAMAL facilitated collaboration between a multinational firm and a Chinese construction company, improving project competitiveness and efficiency.
Strategic partnerships: CAMAL facilitated cooperation between Chinese builders and global leaders like Thyssenkrupp (Read Case Study Here)
Real-World Examples of China Overseas Moves
Chinese companies are no longer limiting themselves to domestic growth, they are moving their operations worldwide, following the markets wherever demand is strongest. From developed economies like the U.S. and Europe to fast-growing regions in Africa, Latin America, and Southeast Asia, firms are setting up factories and partnerships closer to their customers.
1. XCMG – Brazil 🇧🇷
Large manufacturing hub producing thousands of machines annually for Latin America.
XCMG’s Brazilian plant positions the company at the heart of Latin America, bypassing import tariffs and dominating regional heavy equipment supply
See more of XCMG in Action Here!
🚜 XCMG XLGN50 in Action! 🔥 Watch This Beast Get Tested! 💪 #HeavyEquipment #china
By producing locally, XCMG reduces shipping times and customizes machines for Latin American conditions
2. Hangcha – Thailand 🇹🇭
Expanding overseas presence with local operations and customer support.
Hangcha breaking ground on a Thailand manufacturing base
Localization in Thailand allows Hangcha to combine production with direct customer engagement and after-sales support
Case Study—China Chemical Supply Chain
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- CAMAL managed a client’s complex chemical sourcing and logistics needs, ensuring quality and timely delivery.
CAMAL meeting with the client to manage chemical sourcing logistics. CAMAL works closely with clients to streamline complex China and overseas chemical supply chains
3. Geely – Vietnam 🇻🇳
Electric vehicle assembly plants are set up to avoid tariffs and serve local demand.
Geely’s Vietnam plant helps it sidestep tariffs while meeting booming regional demand for EVs
Partnerships with local companies in Vietnam give Geely faster market entry and long-term growth potential.
4. Lenovo – India 🇮🇳
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- Lenovo, the China-founded tech giant, is now manufacturing artificial intelligence (AI) servers in India. At its facility in Puducherry, Lenovo is set to assemble 50,000 AI rack servers and 2,400 GPU servers annually. They’ve also established an AI-centric R&D lab in Bengaluru. Some of this production is intended both for Indian consumption and for exports. Electronics production is spread across multiple continents.
Lenovo’s India operations show how Chinese tech leaders are expanding critical production beyond China while capturing India’s growing IT market
Lenovo launches infrastructure R&D lab in India: Alongside manufacturing, Lenovo’s Bengaluru R&D lab strengthens local innovation and AI capacity
5. SAIC-GM-Wuling – Indonesia 🇮🇩
Developed a major auto plant to supply ASEAN markets.
Indonesia’s booming auto market is a strategic hub for SAIC-GM-Wuling to grow its ASEAN presence
Local production allows SAIC-GM-Wuling to adapt car models to Indonesian consumer preferences
6. DHHI – Australia 🇦🇺
China’s Dalian Huarui Heavy Industry (DHHI) has expanded into Australia by supplying and servicing heavy mining equipment. This move reflects a strategy to be closer to major mining clients and provide after-sales support on the ground. By establishing a presence in Australia, DHHI reinforces its role as a trusted partner in one of the world’s biggest resource markets.
DHHI’s Australia base shows how Chinese heavy industry is embedding itself in resource markets abroad
Dalian Huarui Heavy Industry Group (DHHI) is a leading Chinese manufacturer of heavy industrial equipment, serving sectors such as metallurgy, mining, energy, and bulk material handling. They specialize in high-tech machinery including submerged arc furnaces, continuous casting machines, stackers and reclaimers, as well as large-scale castings and forgings for turbines and marine applications.
By operating directly in Australia, DHHI integrates into global mining supply chains and provides critical after-sales service
7. Kuka Home – USA 🇺🇲 and Mexico 🇲🇽
Kuka Home, a leading Chinese furniture manufacturer, opened production facilities in the U.S. to serve American consumers more directly. Local production helps the company cut delivery times and adapt designs to customer preferences. This investment highlights how “China Overseas” is not just about developing markets but also about competing in advanced economies. Kuka Home opened a manufacturing plant in Monterrey, Mexico also.
Mexico gives Kuka Home tariff-free access to the regional markets under USMCA, cutting lead times for American customers
How Does CAMAL Help
Finding Chinese and Overseas Manufacturing Partners
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- CAMAL helps clients identify and vet manufacturers not only in China but also in overseas locations where Chinese companies have established production.
CAMAL Case Study—Caustic Soda Pearls Supply
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- CAMAL successfully delivered high-purity caustic soda pearls to a U.S. client, demonstrating its ability to ensure consistent quality in global sourcing.
End-to-end support: CAMAL delivered high-purity caustic soda pearls to U.S. clients, ensuring quality and reliability
Are Chinese Companies Moving Overseas?
Yes. More Chinese companies are moving production overseas to be closer to their customers, reduce costs, and manage risks. This “China Overseas” trend is reshaping global supply chains.
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China’s overseas expansion is accelerating, reshaping global supply chains from Asia to Latin America
Are Tariffs Moving Chinese Production Overseas?
Yes. Tariffs have been a major factor pushing companies abroad. By setting up plants in countries like Vietnam, Thailand, and Mexico, firms can avoid trade penalties while still reaching key markets.
Tariffs remain a top driver pushing Chinese firms to establish offshore manufacturing bases
Where are Chinese Companies Moving to?
Chinese firms are expanding into Southeast Asia, Latin America, Africa, and even developed markets like the U.S. and Europe. Popular destinations for Chinese manufacturers include: Brazil, Vietnam, Thailand, Indonesia, and India. The reasons are diverse:
1. Brazil
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- Brazil offers access to one of the largest consumer markets in Latin America, with over 200 million people and strong demand for industrial and consumer goods. Its abundant natural resources and growing infrastructure also make it a strategic hub for manufacturing and exports within South America.
2. Vietnam
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- Vietnam is highly attractive due to its low labor costs, young workforce, and growing role in global supply chains. Favorable trade agreements, including participation in CPTPP and EVFTA, give firms strong export advantages to key markets.
3. Thailand
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- Thailand provides a well-developed manufacturing base, particularly in automotive and electronics, supported by strong logistics and infrastructure. Its investment-friendly policies and position within ASEAN also allow Chinese companies to access regional markets efficiently.
What Companies are Moving Production from China?
From construction machines to mining trucks, Chinese heavy industry is increasingly produced closer to global clients
Examples include XCMG in Brazil, Hangcha in Thailand, Geely in Vietnam, Lenovo in India, and Foxconn in Brazil and Mexico. These firms show how widespread the China Overseas strategy has become.
These moves span multiple sectors:
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- Heavy equipment and industrial machinery (e.g., construction machines, forklifts), automotive and EV supply chains, and electronics/IT hardware assembly.
- Light manufacturing (textiles & apparel, footwear, furniture, home appliances, and plastics/packaging) is also shifting to Vietnam, Thailand, Indonesia, India, Mexico, and Brazil to tap competitive labor, special economic zones, and export agreements.
- A newer wave covers renewable-energy components (solar modules, inverters, battery packs) and medical devices, driven by local-content rules and investment incentives across ASEAN, India, and Latin America.
What Companies Outsource Production?
Many Chinese manufacturers outsource part of their operations to lower-cost regions. Global brands like Foxconn and Lenovo also rely on outsourcing partners to expand their reach.
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Is Apple Moving Manufacturing out of China?
Yes, Apple is gradually diversifying. While China remains its main base, Apple is expanding iPhone and electronics assembly in India and Vietnam through partners like Foxconn. This shift is driven by rising labor costs in China, U.S.–China trade tensions, and the need to reduce overdependence on a single market. India and Vietnam also offer favorable investment policies, government incentives, and growing consumer demand, making them attractive alternatives for Apple’s long-term supply chain strategy.
Apple’s diversification strategy relies heavily on Foxconn’s overseas plants in India and Vietnam
Why are Companies Considering Moving Away from China?
The main reasons include stricter regulations, rising wages, tariffs, and the need to be closer to customers. For many, a China Overseas strategy offers lower costs and greater supply chain security.
Heavy machinery made by a Chinese company overseas
Conclusion – China Going Global Has Only Been Accelerated!
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- Commercial, regulatory, and geopolitical factors are accelerating the “China Overseas” trend.
- CAMAL helps companies navigate this shift, providing sourcing and manufacturing solutions both in China and internationally.
- Companies seeking to benefit from “China Overseas” opportunities should contact CAMAL for tailored solutions.
How can CAMAL help you manage your China Sourcing?
✅ Do you spend too much time finding the right manufacturers in China?
✅Do you face difficulties in communicating your requirements to suppliers in China?
✅ Do your products often need customization just for you?
✅ Do you wish someone could help you with end-to-end procurement, so you can focus on growing your business?
If your answer is YES, Reduce Your China Sourcing Headaches, WhatsApp Us (Faster) or Email Us Now for a FREE Consultation.
✅CAMAL: Quality Factories = Quality Products = Happy Customers✅
Sourcing from Chinese Companies Manufacturing Overseas
