Globalization Is Not Over — It Is Being Reconfigured

As uncertainty becomes the norm, why are Chinese companies continuing to expand into global markets?

Over the past few years, uncertainty has become a defining feature of the global business environment. Geopolitical shifts, supply chain realignments, changes in trade policy, energy price volatility, and the rapid advances in artificial intelligence are reshaping the global economy.

At the same time, a familiar question continues to surface: Is globalization in retreat?

Industrial protection, efforts to localize supply chains, and rising trade barriers in some countries point to a changing global business environment. Yet current patterns in trade, investment, and corporate activity suggest that globalization has not stopped. Instead, it is entering a new phase of adjustment amid greater uncertainty.

Global Trade Continues to Grow

Despite the effects of the pandemic, inflation, geopolitical tensions, and other challenges in recent years, international trade remains an important part of the global economy.

According to the World Trade Organization, goods and services trade, on a balance-of-payments basis, reached USD 34.65 trillion in 2025, representing year-on-year growth of 7%.[1] Although tariffs, geopolitical tensions, and policy uncertainty continue to affect the global trading environment, cross-border trade remains substantial.

Data published by UN Trade and Development also shows that global foreign direct investment has fluctuated in recent years as economic conditions have changed.[2] Cross-border capital allocation, however, continues.

Rather than withdrawing from global markets altogether, some companies may be reassessing their market presence, supply chain structures, and allocation of resources in response to a more complex operating environment.

Globalization Is Placing Greater Emphasis on Resilience

Over the past two decades, efficiency has been one of the central drivers of globalization.

Companies often sought to:

• manufacture in regions with lower costs;
• sell in markets with stronger demand;
• build supply chains across multiple regions.

In recent years, however, more companies have begun to review their exposure to risk and the resilience of their operating models.

The World Economic Forum’s Global Risks Report 2026 describes an increasingly fragmented global environment shaped by geoeconomic confrontation, geopolitical conflict, societal polarization, and emerging technological risks.[3]

For companies operating across markets, this uncertainty is prompting closer attention to supply chain resilience, market presence, and long-term operational stability. Common responses may include:

• multi-region operating models;
• more diversified supply chains;
• more localized operating models;
• more flexible allocation of resources across markets.

Globalization has not disappeared. Companies are placing greater emphasis on resilience, stability, and the ability to operate sustainably across markets.

Chinese Companies Are Entering a New Stage of Global Expansion

For many Chinese companies, international expansion is increasingly moving beyond product exports. Today, more companies are investing in the capabilities required to operate across markets over the long term.

In sectors such as electric vehicles, robotics, consumer electronics, SaaS, digital services, and cross-border e-commerce, long-term expansion may require more localized capabilities in areas such as:

• local teams;
• local customer support;
• local warehousing and logistics;
• local marketing and brand operations;
• localized payment capabilities.

The challenge is no longer simply entering a market, but building the capabilities required to operate there over the long term. Companies are also paying greater attention to how they operate, adapt, and serve customers effectively in individual markets.

At the Second Global Asset Management Forum, topics discussed included global uncertainty, the evolution of asset management in the AI era, and the connections between China and global markets.[4]

These discussions reflect a broader issue facing companies expanding internationally: operating across markets requires more than access. It may also require continued investment in localized operations, risk management, and cross-market coordination.

What European Markets Signal

European markets provide a useful lens through which to observe how globalization is changing.

Europe combines mature consumer markets with established regulatory frameworks. At the same time, expectations around product quality, data security, service experience, and corporate responsibility continue to shape how companies operate across the region.

For businesses, price is only one factor in long-term market development. Success may also depend on:

• brand reputation;
• service quality;
• customer trust;
• operational capability.

Global competition is therefore not only about selling products. It is also about building the capabilities needed to create and maintain value over time.

Artificial Intelligence Is Changing How Companies Operate Globally

Alongside broader changes in the market environment, artificial intelligence is becoming an important factor in how companies operate and expand globally.

Research by McKinsey Global Institute into the economic potential of generative AI suggests that the technology could support efficiency gains and value creation across areas including customer operations, marketing and sales, software engineering, and research and development.[5]

For companies operating across markets, these developments could affect how they manage operations, understand customers, and respond to change.

Long-term expansion requires companies to understand local conditions and adjust their operations as those conditions change. Access to resources remains important, but companies also need the organizational capacity to interpret local changes and respond effectively.

Oceanpayment Insights

Globalization is not over. What is fading is the old model built primarily on single cost advantages and scale-driven expansion.

The next phase of globalization is placing greater emphasis on:

• localization capabilities;
• risk management;
• brand and trust building;
• cross-market operating capabilities;
• the ability to adapt to change.

For businesses, globalization is becoming less a question of where to pursue growth and more a question of which capabilities need to be built.

Long-term market development may depend not on how quickly a company enters a market, but on how well it understands local conditions, adapts its operations, and continues serving customers over time.

References
[1] World Trade Organization, Global Trade Outlook and Statistics, March, 2026.
[2] UN Trade and Development (UNCTAD), World Investment Report 2025: International investment in the digital economy, June, 2025.
[3] World Economic Forum, The Global Risks Report 2026, January, 2026.
[4] China Fund News, “The Second Global Asset Management Forum Concludes Successfully, with More Than 300 Domestic and International Institutions Discussing New Opportunities and Challenges amid Global Uncertainty” [translated title], June, 2026.
[5] McKinsey Global Institute, The Economic Potential of Generative AI: The Next Productivity Frontier, June, 2023.