How China Is Winning Friends and Influencing People

On the traffic-snarled streets of Hanoi, taxi drivers taking a break between rides watch Chinese microdramas—feature-length stories divided into addictive 90-second clips—on their phones. Some commuters zip past on Chinese-made Yadea scooters, while others sit comfortably removed from the noise, dust, and tropical heat in any one of half a dozen new Chinese electric vehicle brands. At home, teenagers message each other on Zalo, a Vietnamese app similar to China’s WeChat (and whose parent company counts WeChat maker Tencent as a major foreign investor), or shop on the Alibaba-run Lazada e-commerce platform. What is happening in Vietnam is occurring across the developing world. Chinese brands and products are becoming as common today as American brands such as Levi’s, Marlboro, and McDonald’s were in the 1980s and 1990s. In South Africa, Hisense televisions, washing machines, and other appliances are top sellers; in Brazil, the electronics pioneer Xiaomi has become a household name, while the newly arrived milk tea and ice cream chain Mixue is drawing large crowds and is set to massively expand its presence in the country. The United States and the brands associated with it today, such as Apple and Tesla, still carry enormous prestige. But most American products are out of the reach of ordinary consumers. China is becoming the country that provides the goods and services that are part of people’s daily lives. The omnipresence of Chinese products is expanding the country’s influence in ways Beijing could only dream of. Many people in the developing world, especially young people, are increasingly associating China with modernity and progress. But this ubiquity is not the result of a strategic calculation made by officials in Beijing. Rather, it is driven by private companies seeking profits. The brutal competition that Chinese firms confront in their domestic market is pushing them to aggressively enter Africa, Asia, and Latin America, where they have moved quickly to localize their offerings and embed themselves in everyday activities. Companies trying to survive the effects of China’s growth model at home are giving the country the kind of positive association abroad that Beijing has been unable to generate from its own top-down efforts. This success, however, has not made China’s economic model healthy or benign. The excessive competition that Chinese firms face erodes their profits and weakens the foundations for long-term innovation. Chinese firms are building a global reputation for making everyday life cheaper, easier, and smoother. Yet the domestic pressures that make Chinese firms so aggressive abroad are also limiting their ability to make China the truly innovative superpower that Beijing aspires to be. CHINA, CHINA, EVERYWHERE Chinese officials have struggled for years to shape foreign perceptions of their country. State media, propaganda, cultural exchanges, and language programs have failed to reach large international audiences. Beijing tried to promote Chinese language and culture through its Confucius Institutes at universities in Australia, Europe, and North America; in the past decade, however, most of these have been shuttered over concerns about academic freedom and a lack of transparency. More coercive tactics, including pressuring critics and censoring dissenting views overseas, have backfired. In 2025, Chinese pressure forced organizers to suspend the IndieChina Film Festival in New York, drawing attention to the long arm of Beijing’s censorship apparatus. China’s private entrepreneurs, however, are developing the country’s brand through commerce. In 2025, China exported roughly $1.6 trillion worth of goods to developing economies, about 50 percent more than it sold to the United States and western Europe combined. Private firms accounted for nearly 60 percent of China’s total foreign trade. In areas as varied as appliances, apps, cars, roads, ports, and phones, Chinese brands are increasingly everywhere in the developing world. Chinese companies have not succeeded simply because they are dumping their surplus product. As Chinese companies expand, the country is becoming associated with things that make daily life easier. When a country’s products, services, and infrastructure become ubiquitous, they begin to shape how people imagine competence, modernity, and possibility. That was true for more than half a century during which American products dominated. It is increasingly true today, as Chinese brands become the default option for billions of consumers. The changes can be felt on the ground. In 2015, one of us (Olander) asked a group of teenagers in Abidjan, the largest city in Côte d’Ivoire, how they felt about China’s presence in Africa. After discussing it among themselves, one of them held up his phone and laughingly said in French, “China is great!” He wasn’t talking about the country’s politics. His impression of China was based on the Chinese phones and Chinese apps that shaped his daily world. In the decade since that discussion in Abidjan, these types of sentiments have become even more widespread. Boomplay, one of Africa’s largest music-streaming services, is jointly owned by Transsion and NetEase, two Chinese companies. And TikTok is fast becoming the dominant platform for both entertainment and news. All of this helps China gain in ways that do not require the world to admire its political system, embrace its ideology, or see Beijing as a moral leader. ADEPT AT ADAPTING Much of China’s new global presence is an outward expression of its domestic economic stress. Within China, firms face what is known domestically as involution: oversaturated markets and ruthless price wars are driving down profits, which pushes companies into a spiral in which they increase output to try to lower costs. The result is too many products and too few consumers to buy them. Involution has become even more severe in the past few years because domestic demand in China remains weak. Consumers have still not recovered the savings they spent down during the COVID-19 pandemic, when many businesses were closed; Chinese families saw their wealth decrease when the property market started to drop in 2021; and young people have become less confident about their job prospects amid high unemployment. In this environment of uncertainty, companies have needed to find new places to sell. Chinese firms’ access to markets in advanced industrial economies also has narrowed. In Europe, Japan, South Korea, and the United States, Chinese companies face tariffs, antisubsidy investigations, data-security scrutiny, and investment restrictions. Policymakers in these places have raised national security concerns over Chinese social media platforms, including TikTok, and they have questioned whether Chinese discount e-commerce retailers such as Shein are mistreating their workers, collecting too much data, and competing unfairly. Facing high hurdles to expand in higher-income countries, Chinese firms have turned to Africa, Latin America, the Middle East, and Southeast Asia. Still, Chinese companies have not succeeded in expanding across the developing world simply because they are dumping their surplus product, as many observers assume. With so many Chinese firms needing to find new markets to survive, competition among them in overseas markets is also intense. These firms benefit from government subsidies, including for new technology. But they are competing against other Chinese firms that receive the same help. The only way they can earn profits is to be unusually adaptive in the markets they enter, which has helped them grow quickly and become embedded into the lives of local populations. They are doing so mostly by becoming highly attuned to what local populations find useful. Consider Transsion, a phone company based in the tech hub of Shenzhen. Nearly two decades ago, Transsion’s founder realized that the phones made by leading companies such as Nokia, Sony Ericsson, and Motorola were not well suited for users in Africa. Major global brands were reluctant to design products specifically for price-sensitive consumers in some of the world’s poorest countries. Transsion saw an opportunity: it built a suite of low-cost, feature-rich phones equipped with batteries suited to Africa’s unreliable electricity grids and dual-SIM capabilities that made it easier to navigate the continent’s fragmented telecom markets. Most important, it made a camera that worked for African users. Whereas camera software used by leading global brands was typically optimized for lighter skin tones, Transsion adjusted its specifications to accommodate darker complexions. African youth suddenly looked better in their own photos, and Transsion phones took off. Chinese firms are building a global reputation for making everyday life cheaper, easier, and smoother. In Southeast Asia, Chinese dramas and short-form vertical videos have found enormous audiences. These shows feature compelling story lines without many of the romantic scenes common in U.S.-produced shows. That has made them popular in culturally conservative parts of the world, particularly in Muslim-majority countries such as Indonesia and Malaysia, where American dramas and reality shows are widely regarded as too provocative. Chinese microdrama streaming platforms DramaBox and ShortMax, for example, have taken a page from Transsion’s playbook. In addition to adjusting pricing models, dubbing their content into multiple languages, and producing stories tailored to local viewing habits, they are increasingly hiring local actors to star in adapted productions of Chinese story lines. There are now more than 300 overseas streaming apps in Southeast Asian countries, and the shows on them have been downloaded more than a billion times. Most important, Chinese brands have been more effective than alternatives from Europe, Japan, or the United States at producing items that are priced for consumers with less discretionary income. This creates the so-called Walmart effect, in which lower-income shoppers are empowered to buy goods and to use services that were previously unattainable. As these brands become more ubiquitous, Chinese products are normalized in local markets. For consumers in the developing world, the fact that their phone, motorbike, or teakettle is Chinese is of little concern as long as the price and quality meet their expectations. Chinese firms are not unique in targeting consumers in developing markets, but they have done so at a scale and speed that has felt transformative for billions of consumers who now have similar access to electronics, cars, fashion, and other goods as people in wealthier countries. Although each time a person drives a BYD electric car or orders a Mixue bubble tea, it doesn’t immediately translate to an improved perception of China, the overall arrival and spread of these new technologies, services, and entertainment products from China can make consumers feel that they are taking part in a larger tide of modernization. The accessibility of Chinese products and services is generating a sense among many people in the developing world that they are no longer on the margins of global culture and economic growth. LOSING THE LONG GAME But the same competitive dynamics that are driving Chinese companies to thrive in the developing world are undercutting the country’s overall innovation potential. When profit margins are locked in a downward spiral, firms have to spend heavily to defend their market share. They have no room for long-term planning and no cash to invest in increasing their productivity. Although a few large firms, such as BYD, have the cash flow to keep investing in themselves, most companies are operating with little financial cushion. This will create headaches for Chinese companies down the line. Innovation requires money: if firms cannot earn healthy profits, there is no sustainable way to reward investors and reinvest in research and development. State subsidies can provide quick infusions of capital, but only up to a point. A race to the bottom may produce very competitive products in the short run, but it can leave firms unable to improve their quality, build a reputable brand, or develop the managerial capacity needed for long-term international success. Firms trapped in a cycle of involution are very good at cutting prices. But low prices are rarely sustainable once companies need to establish durable competitive advantages that create new opportunities for growth. The solar panel industry is an example of this challenge: Chinese companies dominate manufacturing, and global demand is high, but severe overcapacity and cutthroat pricing have generated industrywide losses that threaten sustained investment in R & D. There are also costs for the countries receiving this new wave of Chinese products. Cheap Chinese inputs lower prices for consumers and support a variety of other types of manufacturing. But competing against firms backed by China's vast industrial supply chain juggernaut is difficult. China’s expanded presence can lock local firms into low-value parts of the industry, preventing them from gaining the knowledge and technology they need to enter more sophisticated sectors, which foreign firms currently lead. Chinese firms, in other words, are squeezing local competitors in developing markets in which domestic companies are still trying to build capacity. In Thailand, for instance, nearly 2,000 factories closed between 2023 and 2024 because manufacturers could not survive under pressure from cheap Chinese imports as well as rising energy prices and declining productivity. China’s expanding commercial reach deepens the problems that pushed its firms abroad. That concern may lead many developing countries to put up barriers to Chinese products. Many are already doing so. Vietnam and Indonesia have pushed antidumping measures in sectors such as steel and ceramics, in which local producers struggle against cheap Chinese imports. Brazil raised tariffs on electric vehicles and Mexico’s Congress approved tariff hikes on more than 1,400 products, many of which the country primarily imports from China (which lacks a free trade agreement with Mexico). The South African government is introducing new certification requirements for selected Chinese imports, including generators and solar panels, after domestic manufacturers linked low-cost imports to factory closures, weak industrial output, and job losses in the country. This backlash reveals the promise and limits of China’s growing influence. Chinese firms are rapidly gaining ground among consumers in countries in the developing world, but in many cases such success has increased tension with governments and industries in those same places. At a micro level, Chinese brands are shining a more positive light on the country and the opportunities it provides to individuals who have been left out of previous eras of global growth. At a macro level, however, the foothold that companies have established risks making China appear to be condemning countries to a new form of dependence. This deepens trade frictions and weakens Beijing’s claim to represent a more mutually beneficial model of development. LET IT BE The United States is ill equipped to counter the influence that China gets from its indispensable presence in the developing world. American firms have few answers to the products and content that global consumers increasingly want and find from China. U.S. companies do not want to expand into markets that have low profit margins, price-sensitive consumers, and politically fragile operating environments. But Beijing, too, is poorly positioned to handle influence that comes from the bottom up. The government has taken notice of Chinese brands’ success in the developing world, and it often wants to position itself as a driving force behind them. Beijing has also tried to package political propaganda as organically produced entertainment or influencer content, but such efforts are more likely to undercut China’s influence than to promote it. China’s localized commercial efforts are effective because they do not feel centrally orchestrated. The more the Chinese state tries to discipline this ecosystem into an overt national narrative, the more it risks undermining the bottom-up quality that makes it resonate, especially among digitally native youth. Beijing has covertly paid influencers to push its political talking points about major events such as the 2022 Winter Olympics, sparking international backlash, and its political rigidity has often stymied organic efforts to spread Chinese culture. Chinese costume dramas with homoerotic content, known as “boys’ love,” for instance, proved an unexpected hit in Southeast Asia, drawing foreign audiences toward Chinese literature and martial arts. In 2021, however, Chinese regulators condemned the genre for promoting so-called abnormal aesthetics, cutting off one of the country’s most promising cultural exports. Even if Beijing stays out of the way, the larger economic risk is that China’s expanding commercial reach deepens the problems that pushed its firms abroad in the first place. As Chinese companies chase overseas markets to escape weak domestic demand and brutal price wars, their short-term success relieves pressure on leaders in Beijing to fix the country’s underlying growth model. It will be an empty victory if Chinese firms’ growing reach slows the country’s much-needed transition toward a sustainable economic system built on higher productivity and more innovation. You are reading a free article Subscribe to Foreign Affairs to get unlimited access. - Paywall-free reading of new articles and over a century of archives - Six issues a year in print and online, plus audio articles - Unlock access to the Foreign Affairs app for reading on the go Already a subscriber? Sign In