Factory of factories: China’s manufacturers join wave of overseas expansions

With domestic profits narrowing and production capacity expanding, China’s firms are continuing to widen their overseas footprints in search of new, more lucrative markets. In this series, we examine China Inc.’s next phase of “going global” and the complex, challenging international environment its companies have chosen to enter.

China, known as the “world’s factory” after decades spent manufacturing and shipping much of the world’s consumer goods, is now going a step further: as a number of internal and external concerns create more incentives for the country’s companies to diversify their revenue streams, they have begun exporting their factories, too.

Vince Li, an entrepreneur based in Guangdong province whose firm produces chemicals used for surface coatings in the automotive and furniture sectors, is one of many business owners to join the latest proliferation wave.

Having opened his first overseas factory near Ho Chi Minh City in southern Vietnam this year, he admitted he was making the move after many of his peers.

His factory in Guangdong used to receive ample orders from the domestic market, providing little motivation to expand overseas. But a slump in domestic demand and moves abroad by his customers have changed that calculus.

“If we do not expand overseas now, we may miss our last chance,” he said. “Many of our domestic clients have set up production overseas, and if I don’t follow suit, they’ll choose other suppliers.”

The first phase is already in production, and the factory, Thuan Thai Hardware – which covers ov