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Chinese tech giant Tencent has reportedly picked Singapore as its Asian hub, considering the shift of some business operations - including international game publishing - out of China. Likewise, TikTok's Chinese owner ByteDance is reportedly planning to make Singapore its headquarters for the rest of Asia. Other Chinese tech companies including Huawei's cloud division, Alibaba's Ant Group and Haitong Securities also seek cooperation with local business organizations in Singapore.
Chinese tech companies "going out" approach is a part of their global expansion bids, in line with China's overall economic development strategy - the "dual circulation" plan. The trend started before the outbreak of the trade war and is expected to continue. It's also the inevitable development of Chinese tech enterprises.
Why do Chinese tech companies have to go out? In doing so, they can reduce the distance from their overseas users to achieve localization. In addition to seeking easier channels for raising investments, many tech companies chose to list in the US and Hong Kong stock markets in order to narrow the differences with their users.
"Going out" is also a part of spreading China's influence to the outside world. Chinese tech companies used to be followers of NASDAQ listed companies, but now China's internet, especially mobile internet, is advancing faster than the rest of the world, and the internet players in the Chinese market are as popular as those being copied abroad. The speed and influence of Chinese tech companies' success in going global is not what it used to be.
"Going out" is the best way to realize the "dual circulation" plan. The plan aims to develop the industrial chain, but the priority is still on the demand side. China has the largest domestic market, but that doesn't mean that companies can ignore the overseas market of 5.6 billion people.
Singapore and China have small cultural differences, similar administrative systems and lower communication costs. China's digital technology radiates across Southeast Asia with Singapore as the hub, and then continues to reach overseas markets in Southeast Asia. This is a more rational and safe choice in the current global geopolitical competition climate.
With the increase in the income and education level of domestic residents, the replacement of new for old industries is inevitable. Companies that were at the end of the industry chain in the past will develop upstream. As a part of this process, Chinese tech companies can serve as bridges to provide industrial chain extensions for the internal circulation of manufacturing companies, such as developing financial services, cross-border e-commerce, or providing convenient solutions for cross-border logistics.
Chinese tech companies' global approach is the prevailing way. If more and more people use Chinese social media apps and play games developed by Chinese companies, Chinese tech companies will become more and more important internationally. Of course, before this happens, Chinese companies need to work hard to achieve localization overseas, place their international business centers closer to users and serve them well, so that they do not have any worries in the future.