“My Friends in Tech Say, ‘India Market? I Wouldn’t Bother'”

Guancha: You mentioned the risks of the U.S. market. There is a lot of focus on the tariff policies following Trump’s presidency. What direct and indirect effects might these have on Chinese companies expanding into the U.S. market? What are businesses’ views on this? Apart from tariffs, how might Trump’s other foreign policies, such as trade barriers and investment restrictions, create a chain reaction that affects Chinese companies’ expansion into other global markets?

Da Ni, the former head of Huawei’s overseas business

Da Ni: If you break down the trade between China and the U.S., you’ll find that the highest proportion of exports are still in apparel and mechanical and electrical products. However, the largest portion of these mechanical and electrical exports isn’t from Chinese-owned brands; it’s more about fulfilling orders from U.S. factories.

In the early stages of China-U.S. trade relations, China took on the role of being the manufacturing hub. Its overall trade volume was linked to orders placed by U.S. companies. For example, when companies like Honeywell or Intel set up factories in China, products naturally were exported from China, forming part of their supply chain.

But in recent years, U.S.-owned businesses have been retreating from the Chinese market, and there has been a fragmentation of the industrial chain. This has led to a natural shrinkage in export orders and technical cooperation between China and the U.S. So, the additional tariffs on China’s high-tech products imposed by the U.S. this time don’t really cause significant new damage—it’s unlikely to harm China’s industrial capabilities much. Of course, it could still have an impact on low-value-added products, such as cross-border e-commerce.

Right now, Chinese companies have to find ways to route their exports through third countries and actively shift from OEM (Original Equipment Manufacturing) to creating their own brands. The world is vast, and even without the U.S. market, there are plenty of emerging markets to explore.

Huawei was once in the U.S. market, but over 20 years, they faced repeated interruptions in their bids and were never able to establish a large-scale presence there. In contrast, they broke through and scaled up in other places like Europe and Japan. Even with Huawei’s strong capabilities, they couldn’t make it in the U.S., and that was during China’s golden decade after joining the World Trade Organization, not in the current U.S.-China competitive era. So, it’s easy to imagine how difficult it would be for other Chinese industrial and tech products to enter the U.S. market.

On the issue of routing through third countries—such as the auto industry going to Mexico or the photovoltaic industry to Southeast Asia—there are new compliance requirements emerging in the U.S. which could penetrate companies’ equity structure. Even if U.S. businesses want to partner with Chinese companies, they may not be able to do so, or they may be unwilling to take the risk, so they’ll turn to new supply chains.

However, China never had many high-tech, value-added products in the U.S. market under its own brand anyway. Take Huawei, for example—it’s still doing well, right? So, even without the U.S. market, Chinese businesses can still thrive.

Actually, most people have already prepared for Trump’s new policies, and the country has made a lot of preparations.

Among the entrepreneurs I’ve met, some still hold a certain level of optimism about the U.S. market. Due to path dependence, they tend to believe that if they do business with the U.S., they can scale up quickly. As a result, they focus a lot on compliance, ownership structure, and intellectual property checks, still hoping to set up factories in the U.S. or Mexico.

But, in addition to expectations, there is a reality: The U.S. can pass a law anytime that will penetrate your equity structure, and if they find out you’re a Chinese company, even if you set up a factory in Mexico, they can still target you. There’s simply no way around it.

I think our government is actively working on a transformation, asking: If there were no U.S. market in the world, how would the country adapt? Let’s not even consider the markets where the U.S. has heavy intervention; there are still markets where U.S. intervention is less, and we can still make headway.

Guancha: Trump declared a national energy emergency, ending the “Green New Deal” and withdrawing incentives for electric vehicles. What direct impact will this have on Chinese companies in the electric vehicle, photovoltaic, and other related industries expanding abroad? How should businesses respond? After the U.S. exited the Paris Agreement, what new obstacles might Chinese companies in the green tech sector face in terms of international cooperation projects and market access? Could you provide some strategies for dealing with these challenges?

Da Ni: First, I’d like to say that global green initiatives are a trend. To some extent, this has already become a global consensus. Trump finds it very difficult to completely reverse the collective understanding about climate issues that has emerged among humanity.

Second, what’s the current level of technology? I have a friend in California who’s been in the new energy field for 20 years. He did a calculation for a household: without U.S. government subsidies, new energy tech products can break even in about 8 years compared to conventional grid electricity.

Economically, why wouldn’t people use such products? If I can break even in 8 years and my product has a 25-year lifespan, then the following decade and more is pure profit.

So, both economically and morally, there are compelling reasons to support the development of green, low-carbon technologies. This is a global trend, and I think Trump can’t stop it.

In fact, many U.S. manufacturers still source panels and equipment from China because, without Chinese products, they can’t find better alternatives.

Now, the U.S. government has canceled some related subsidies and raised some tariffs, but once this phase is over, things will stabilize. Looking at the trend of China’s photovoltaic industry, some companies may naturally retreat during this big wave. China experienced such a downturn from 2008 to 2012, but ultimately, the industry shrank a bit in terms of market and capacity, and the overall sector in China remained strong.

This is because China’s manufacturing industry chain is too robust, and European and American companies are fully aware that their manufacturing industry won’t be coming back to the U.S. anytime soon—at least not for a long time.

Editor: In this interview, Da Ni also shared an analysis of the Indian market while discussing emerging overseas markets in Southeast Asia, Africa, and Latin America. Here’s the excerpt:

Da Ni: When I talk to friends in the tech and industrial sectors, those with experience tend to have a common sentiment: the U.S. market is too risky right now — I’d rather stay away. And they have another view: Indian clients? Not worth the hassle.

For companies expanding overseas, India is like a market surrounded by three others: the Asia-Africa-Latin America (AAL) market, the European market, and the U.S. market. Sure, it’s a huge market, but stories of “money made in India stays in India” are all too common. In the past, numerous Chinese state-owned enterprises ventured into India, only to face setbacks. Cases of Xiaomi, OPPO, Vivo, and Huawei being investigated, enticed with promises of contracts that never materialized, or having orders abruptly canceled are endless. One notable example involves a Chinese bank that provided buyer’s credit for an Indian project, only to find itself unable to recover billions of yuan.

Of course, it’s not just Chinese companies facing these issues — India applies the same “lock them in and take them down” strategy with Western businesses as well. In fact, India was the first country to ban TikTok. Back in 2014, when Chinese internet companies initially looked to expand abroad, India was a prime target. However, due to its policy environment and the low Average Revenue Per User (ARPU) — the revenue generated per user in the telecom sector — almost all these ventures ended in failure.

Moreover, India has ambitions of becoming a global power, and its major conglomerates wield considerable global influence. We’ve already seen many Chinese suppliers in Apple’s supply chain exit India, handing over control to Indian conglomerates. The market entry requirements for India are extremely high — companies must shift parts of their supply chains to India, appoint local executives, use designated local suppliers, and endure rigorous tax and visa scrutiny. While the market is vast, so are the risks.

Additionally, India places great importance on higher education, and its labor force is steadily becoming more skilled. In fields like electronics, automotive, and IT, India has already demonstrated notable prowess, making market penetration even more challenging.

Finally, I’d like to share one perspective: if the global market becomes increasingly polarized — or if globalization fragments into “hemispheres” — then China’s tech and industrial sectors could secure the other half of the market, focusing on Asia, Africa, and Latin America while striving to gain a foothold in Europe. Companies can use this lens to reverse-engineer their strategic roadmaps.

Editor: Li Jingyi