Engage with China or risk falling behind
In the past years we at Horsten International have encountered a persistent reluctance of many Western entrepreneurs to fully engage with China’s evolving business landscape. We are convinced that now it’s high time to move beyond our Eurocentric, protectionist perspectives and recognize the tremendous opportunities emerging from China’s dynamic and innovative market.
As a China consultant and investor since the late 1990s, at Horsten International we had the privilege of witnessing first-hand the remarkable transformation China has undergone over the past three decades. Through numerous projects with European companies, we have seen the country evolve from a low-cost manufacturing base into a global innovation powerhouse. We could easily fill a book with stories of the ups and downs along the way—but overall, the journey has been both challenging and deeply rewarding.
What stands out most, however, is how rapidly things have changed in just the past five years. While the long-term evolution is impressive, the recent shift in how Chinese and western companies interact is even more striking—and worth taking a closer look at.
Just a few years ago, the typical trajectory of a project involving China was simple: a European company would take the lead, with China serving primarily as a manufacturing base or supplier. The “Made in China” label stood for cost-efficiency and scale, not necessarily good quality, and the Chinese side was usually reactive—responding to European requests, product specifications, and logistical needs. Partners were looked for in China, components were procured, and the innovation and strategic direction often came from Europe.
How that traditional business model has changed dramatically in just a few years!
Today, China is no longer just the world’s factory. It has become a powerful originator of business initiatives—often driving projects from the start. Increasingly, Chinese companies are the ones looking outward, searching for partners, distributors, or acquisition targets in Europe. The direction of business flow has, in many cases, reversed. We invite all readers to visit a few exhibitions in Europe. Depending on the industry, you’ll be amazed to see how many Chinese companies exhibit on exhibitions in Europe.
Several factors explain this rapid transformation.
1. From cost advantage to innovation powerhouse
Over the past decade, China has invested heavily in innovation, research and development, and high-tech sectors. Companies like Huawei, BYD, and CATL are no longer followers—they are now global leaders. In industries such as electric vehicles, green energy, e-commerce, and AI, Chinese firms are shaping the global agenda. Chinese firms now go global: they actively seek global expansion and look for worldwide partners not just to sell products, but to co-develop technologies, enter new markets, and build brand legitimacy. It’s also amazing to see how professional many Chinese companies have become, and how they have improved in communication.
2. Maturing domestic market, global ambition
China’s domestic market has become increasingly competitive and saturated. For ambitious Chinese companies, growth lies abroad. Europe, with its developed consumer base and strong industrial infrastructure, is an attractive target. Moreover, the “dual circulation” strategy promoted by the Chinese government encourages domestic strength alongside international expansion. This policy shift has accelerated outbound business initiatives.
3. Changing dynamics of trust and strategy
In the past, European firms viewed China mainly through a cost lens. Today, Chinese firms see Europe through a brand, compliance, and trust lens. To succeed in European markets, Chinese companies must build credibility and local presence. They seek local partners not only for distribution but for co-branding, compliance navigation, and strategic alignment. This marks a profound shift in how Chinese firms view global business—as a two-way street rather than a subcontracting relationship.
4. European adaptation
European companies, especially SMEs, are gradually adapting to this new reality. Instead of always initiating, many now respond to Chinese inquiries. Some have become key partners in China-led ventures, offering branding, technological expertise, and access to European regulatory frameworks. Others are being acquired or forming joint ventures to unlock mutual benefits.
Conclusion
The China-Europe business relationship has undergone a remarkable transformation. The days of one-sided European-driven projects are fading. Today, Chinese firms are often the initiators, reshaping the roles and expectations on both sides. This shift not only reflects China’s rise as a global economic power, but also challenges European companies to rethink their strategies—from gatekeepers to collaborators in a new, more balanced global business landscape.
Our advice is clear: embrace cooperation with China and keep an open mind, or risk missing opportunities and falling behind.
Horsten International is at the forefront of these impressive developments and is open to help European companies look for Chinese partners, or assist Chinese companies with their expansion plans in Europe.
Want to read more about this topic? See hereunder a few interesting articles we published some time ago:
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