Going Global Without Stepping on Landmines: How to Choose Partners? Southeast Asia Veterans Share Their Insights

Ask AI · How do entrepreneurs choose reliable overseas partners?

In mid-March at Yabuli, the snow was still falling gently. Inside, entrepreneurs were passionately discussing the topic of going abroad, with the venue packed, latecomers only able to lean against the walls.

Southeast Asia and the Middle East have been popular regions for Chinese companies to expand into in recent years. However, with the changing situation in the Middle East, the “security concerns” of Gulf countries have been alleviated. At the 26th Yabuli China Entrepreneurs Forum annual meeting, in the sub-forum “Overseas Experience: Successes and Lessons” (hereinafter “the Forum”), many entrepreneurs stated that their close geographical proximity and stable relations with China still make Southeast Asia the top choice for many companies to go abroad.

Zhou Shixin, director of the Southeast Asia Research Center at the Shanghai Institute for International Studies, told Yicai that China and Southeast Asian countries have long maintained close market ties, benefiting mutually. However, it’s also important to recognize that there are many differences between the two sides—there is both complementarity and homogeneity—which leads to both cooperation and competition.

Choosing Partners

Expanding into Southeast Asia may seem like a familiar topic, but at the Yabuli Forum, entrepreneurs shared their own experiences and lessons learned.

During discussions, the term “partner” was repeatedly mentioned as a key factor influencing success or failure in going abroad. Today, China’s high-quality products going overseas are no longer lacking potential partners; instead, the question is how to select the right ones.

Tian Yuan, chairman of Maysheng Medical Group, said that his company is a leader in its niche market. “After exploring the Southeast Asian market, many people come to us—some want to become your agents, others want to cooperate,” he explained. He divides potential partners into three categories.

The first are local companies within the same industry that already have some reputation; the second are middlemen claiming to have high-level resources and strong clearance capabilities, but their reliability is hard to gauge; the third are local Chinese, who speak the same language and can clearly explain the local environment, but may lack deep roots locally.

Tian Yuan admitted there’s no single standard for choosing partners, but the most important criterion is “ability to handle local affairs.” He cited a recent deal his company closed—initially not planned, but when the opportunity arose, the local partner demonstrated strong coordination skills. Even when a competitor’s CEO personally stepped in to offer a lower price, the partner’s excellent coordination secured the deal. “That’s a very good example,” he said.

For smaller tech startups, asset-light expansion might be more suitable. At the forum, a representative from a tech startup shared their experience in Malaysia. They partnered with a large local company, which funded the purchase of production equipment, while the Chinese side provided raw materials, technology, and branding. They established a joint venture, sharing profits proportionally. The representative said, “If problems arise locally, I can withdraw immediately. For me, that’s the safest model.”

Lessons from Japan

When discussing China’s overseas expansion strategies, the forum moderator, Li Xiaojia, the rotating chairman of Yabuli Forum and founder of Diguantong, posed an important question: as a major country that previously expanded globally on a large scale, why did Japan’s globalization efforts in the 1980s end in failure?

Li Xiaojia explained that Japan, with its strong capital, swept the world but ended in disappointment. Regardless of Japan’s outcome, today’s Chinese companies face capital constraints and are restricted by capital account controls, making it difficult to replicate Japan’s capital-driven overseas expansion. However, he also noted that without capital support, companies relying solely on “bare bones” expansion would struggle to establish themselves abroad.

Regarding Japan’s lessons, Ryan Group chairman Luo Kangrui shared his own story. He said that in the 1980s, Hong Kong experienced a wave of Canadian investment fever, and he followed suit by investing in three hotels in Canada. But due to a lack of understanding of the local market and his core business being construction—mainly engineers—he couldn’t effectively manage the hotel operations. Ultimately, he had to sell at a loss of several hundred million, which still pains him today.

Luo Kangrui then pointed out that Japan’s failure in overseas expansion was due to blindly following trends, lacking clear goals, and not leveraging their own strengths. “Japan bought Rockefeller Center and various landmark assets, but most didn’t generate good returns,” he said.

However, some participants noted that while Japan’s capital expansion failed, its management systems successfully went abroad and achieved long-term success. Toyota’s production model and Panasonic’s organizational management, for example, continue to influence global manufacturing.

From local practices in Southeast Asia to the lessons of Japan’s overseas ventures, the forum clearly outlined China’s current overseas landscape: it’s no longer just about market expansion but a systemic transfer of capabilities; it’s no longer a one-way flow of capital but a rebuilding of rules and trust. And for Chinese companies, this journey has only just begun.

(Article from Yicai)