From "Made in China" to "Made by China": China Now Exporting Entire Factories Abroad

China's Outbound Investment Up 7.1%, Domestic Investment Down 3.8%
Factory Relocations Overseas Accelerate Amid Tariffs and Weak Domestic Demand
Trend Likely to Gain Momentum with U.S.-China Investment Committee Agreement

China, once known for manufacturing and selling nearly every product in the world, is now exporting its factories themselves abroad. There is an emerging consensus that the focus is shifting from simple “Made in China” manufacturing to “Made by China,” where products are produced locally using Chinese technology.

A BYD vehicle on the production line at the Camacari Industrial Complex in Bahia, Brazil. Photo by Reuters Yonhap News Agency

According to Yonhap News, citing the Wall Street Journal (WSJ) on the 27th (local time), "Chinese companies, faced with Western tariff barriers and sluggish domestic demand, are relocating their production bases overseas one after another." In recent years, Chinese manufacturers have suffered from falling prices and declining profitability. As rising tariffs add to these challenges, they have become more cautious about investing domestically, while accelerating the expansion of their overseas production capacity. Last year, China's outbound direct investment increased by 7.1% compared to a year earlier, whereas domestic investment fell by 3.8%, marking the first annual decrease on record.

The phenomenon of overseas expansion, known as "chuhai," has already become commonplace. This trend is expected to accelerate further following the agreement to establish a "U.S.-China Investment Committee" during the U.S.-China summit, which coincided with U.S. President Donald Trump's visit to China. According to WSJ, a senior U.S. official stated that the committee will serve as a mechanism for both governments to jointly review Chinese investment plans in the United States.

CATL logo of the Chinese battery company. Photo by Reuters Yonhap News.

The expansion of Chinese companies' overseas production bases is becoming visible in various sectors such as electric vehicles, batteries, and home appliances. Contemporary Amperex Technology (CATL), the world’s largest battery company, is pursuing projects in Hungary, Indonesia, and Spain. In the United States, instead of building its own factories, CATL has adopted an indirect strategy by licensing its battery technology to Ford. Ford is reportedly constructing a production facility worth 3 billion US dollars (about 4.5 trillion won) in Michigan to manufacture batteries designed by CATL.

In the automotive sector, Chinese companies are discussing local joint production with European competitors. Jeep maker Stellantis announced this month that it would produce electric vehicles with two different Chinese firms in Spain and France, respectively. Ford and Geely are also negotiating similar deals in Spain and are exploring the possibility of expanding such arrangements to the United States. Home appliance manufacturer Midea has production facilities in Brazil and Thailand, and recently partnered with Electrolux to embark on joint manufacturing in South Carolina, USA, and Mexico as well.

"Manufacturing Vitality" vs. "Market Side Effects": Reactions Remain Divided

Some believe that such investments could reinvigorate local manufacturing sectors. They point out that the entry of Japanese carmakers into the United States in the 1980s and 1990s pressured local manufacturers and suppliers to adopt new approaches, ultimately boosting the competitiveness of the U.S. auto industry.

Chinese President Xi Jinping and U.S. President Donald Trump. Photo by Reuters and Yonhap News Agency

In fact, some analyses indicate that Chinese investment in sectors such as automotive in Mexico created more than 100,000 jobs between 2020 and 2023. Earlier, in 2024, Chery—one of China's largest automobile exporters—helped revive a Spanish plant in Barcelona that Japanese automaker Nissan had abandoned due to financial difficulties. Furthermore, the approach of sharing production facilities with Chinese companies is expected to benefit European automakers, who face heavy fixed costs.

On the other hand, concerns are mounting about the negative impact of China’s aggressive expansion on the European market. There are worries that China’s unique culture of excessive competition in the auto industry—so intense that firms are willing to endure losses—could be transferred to Europe, along with concerns over environmental impact and potential violations of workers’ rights.

The European Union (EU) cites the fact that the automotive industry supports 7% of the EU economy and 13 million jobs as grounds for concern. In the United States as well, protectionist arguments have surfaced to defend domestic industries. Recently, dozens of Democratic lawmakers urged President Trump to "ban Chinese automakers from producing vehicles in the United States and block the entry of Chinese-made vehicles produced in Mexico or Canada," arguing that "the auto industry should not be handed over to a strategic competitor seeking global market dominance."

This content was produced with the assistance of AI translation services.