Roundtable Dialogue: "Seeking Gold Overseas. In the Era of Global Birth, Escort Those Who Roam the World" | WISE 2024 King of Business

The environment is constantly changing, and the times are always evolving. The "Kings of Business" follow the waves of the times, insist on creation, and seek new driving forces. Based on the current large-scale transformation of the Chinese economy, the WISE2024 Kings of Business Conference aims to jointly discover the truly resilient "Kings of Business" and explore the "right things" in the Chinese business wave.

From November 28 to 29, the two-day 36Kr WISE2024 Kings of Business Conference was grandly held in Beijing. As an all-star event in the Chinese business field, the WISE Conference is already in its twelfth year, witnessing the resilience and potential of Chinese business in an ever-changing era.

2024 is a year that is somewhat vague and with more changes than stability. Compared to the past decade, everyone's pace is slowing down, and development is more rational. 2024 is also a year of seeking new economic momentum, and the new industrial changes have put forward higher requirements for the adaptability of each subject. This year's WISE Conference takes Hard But Right Thing as the theme. In 2024, what is the right thing has become a topic we want to discuss more.

We are in a great era of being "Born Global". In this era full of opportunities and challenges, after we have obtained the enlightenment of going global, the next key is how to better explore overseas markets and realize the globalization dream of enterprises. Therefore, enterprises have begun to pursue cross-border services.

As a key force in the process of globalization, cross-border services closely connect business activities in different countries and regions, not only bringing new development opportunities for enterprises, but also providing more high-quality commodity and service options for global consumers.

Based on this background, 36Kr specially planned a roundtable dialogue on cross-border going global at the WISE2024: "Going Overseas to Explore Gold: In the Era of Being Born Global, Escort Those Who Are Ready to Conquer the World". Wang Huan, the founder and chairman of Yujia Zhike, Peter Dávid, Minister and Head of the Commercial Section of the Embassy of Hungary in China, Zhong Yi, Vice President of LianLian International, and Wang Xin, Vice President of Beyondsoft Technology Co., Ltd., sat together to discuss the opportunities, risks, and challenges of enterprises going global.

Roundtable Scene

The following is the live record of the roundtable dialogue, edited and sorted out by 36Kr:

Wang Huan (Host):Hello everyone! I'm very glad to participate in this roundtable forum on going global. I'm Wang Huan, the founder and chairman of Yujia Zhike. Yujia Zhike mainly provides our clients with a complete set of comprehensive solutions including listing guidance, price structuring, tax planning, family office, digital transformation, and business strategies.

I'm also honored to serve as the host of this roundtable. The main theme of today's roundtable is about going global. In fact, many excellent enterprises have expounded their thoughts and put forward their visions on this topic this morning. Our roundtable today may be different from thinking about the problem of going global from the enterprise side. Because going global, as Mr. Zhang mentioned earlier, is not an option to some extent, but a necessary question. However, in the entire evolution process of going global, in addition to the ideas of enterprises, we also need to consider the customs, culture, political and economic basis of various countries around the world, and also rely heavily on the judgments of professional institutions on the global market and business. Therefore, we are honored to invite Peter from Hungary, Mr. Zhong from LianLian International, Mr. Wang from Beyondsoft International, including representatives of government diplomats, including payment platforms, and professional companies for going global solutions. I hope to collide with some new ideas and thoughts for everyone from different dimensions.

Entering our discussion session, the first question I would like to ask Mr. Peter is that we know that Hungary and China have always maintained very friendly economic and trade exchanges and people-to-people exchanges. This year is also the 75th anniversary of the establishment of diplomatic relations between China and Hungary. The leaders of the two sides have elevated the relationship between China and Hungary to a new era, an all-weather, and comprehensive strategic partnership, which is a very high positioning. From this perspective, I would like Mr. Peter to share the current economic and trade situation between China and Hungary and what new updates are there in 2024?

Peter:Yes, thank you very much. In recent years, Hungary's other bilateral trade with China has been growing steadily. So now China is our largest trading partner outside the EU countries, and in this regard, China has surpassed the United States. Currently, China is our ninth largest trading partner, accounting for 4% of our total foreign trade. Last year, our bilateral trade with China exceeded 14.5 billion US dollars, which is an important milestone. Ten years ago, bilateral trade was even less than 8.5 billion US dollars. So in the past 10 years, we have come a long way. Our bilateral trade flow has increased by 73%. At the same time, as you mentioned, this year is also a very important year for the bilateral relations between Hungary and China. I expect that the good bilateral relations can be transformed into more achievements in the economic cooperation between Hungary and China. Here, I would like to mention not only trade, but also the field of investment. For example, last year Hungary has become the largest investment destination for Chinese enterprises in Europe. The number of direct flights between Hungary and China can also illustrate the problem: At the beginning of last year, when we lifted the epidemic control restrictions on China, we only had one direct flight connecting our capital; Now, we have 21 direct flights per week connecting our capital Budapest with seven major cities in China, such as Beijing, Shanghai, Chongqing, Xi'an, or Guangzhou and Shenzhen.

Wang Huan (Host):Thank you very much. I'm very excited to hear Mr. Peter's introduction. Because even though there are many uncertain changes in the current international situation, we can see that China and Hungary have made very significant progress in economic and trade exchanges this year. It is also mentioned that China is Hungary's largest partner outside the EU, and Hungary is also one of the largest investment destinations for China in Europe. In fact, these have brought us many positive thoughts and feelings in the current uncertain environment. Of course, we have also made very positive progress from the government's perspective. I also want to ask Mr. Zhong and Mr. Wang from the perspective of enterprises, how do you view 2024, and what new plans, ideas, and new thinking points do you have?

Zhong Yi:Let me briefly introduce myself. I'm Zhong Yi from LianLian International. LianLian International is the core cross-border payment brand of LianLian Digital. Currently, we have served more than 4.9 million enterprise customers, and we are also payment partners of e-commerce platforms such as Amazon, TikTok Shop, and Shopee. Many previous guests have mentioned that going global is both an opportunity and a challenge, including the saying that "if you don't go global, you will be out". Some enterprises, because their domestic business is blocked, want to go global blindly, and it may be less than a year from entering the industry to finally giving up. There is another type of enterprise that says it wants to go global, but it has been on the road of investigation. When it investigates to a certain extent, it finds that a certain country or region is very difficult, and then it studies the next market. As a result, a year has passed, and they haven't started to move. This is a more serious problem that many small, medium and micro-sized enterprises going global are facing in the past two years. 

Of course, there are also many opportunities for going global, because not only e-commerce, but also new models of service trade types are constantly emerging. Especially cross-border e-commerce, this is also the industry and track that we have been focusing on providing services. We do see that in recent years, many large enterprises and platforms going global, including TEMU, TikTok Shop, etc., have made great achievements in overseas shelf e-commerce and have also brought video live-streaming with goods to overseas. These have provided many opportunities for small, medium and micro-sized enterprises. Of course, where there are opportunities, there are also certain challenges that need to be dealt with.

Wang Huan (Host):Mr. Zhong means that under the theme of going global, opportunities and challenges coexist. When facing opportunities, we should be courageous in making decisions, and when facing challenges, we should be prepared in advance.

Wang Xin:I come from Beyondsoft Technology Co., Ltd. Going global is a relatively hot topic in the past two years, but it is not new to Beyondsoft. Because we are an IT service company established in 1995 with a global delivery capability. Up to now, we have our delivery teams in 13 countries and regions. And perhaps one-third of our entire listed company's revenue comes from overseas customers. The relatively big experience in 2024 is that it feels like the aftershock after 2023. Everyone is still in the process of building confidence. At this time, suddenly there is a concept, or suddenly a group of people say that we want to go global because we have overcapacity, tariff issues, and geopolitical issues. So I think that for some leaders themselves, when doing business, their enterprises are global enterprises, so there is no such problem as going global or anything like that. Except for these leaders, everyone is also going global. It seems that if I don't go global, I will be a bit behind. Even some company leaders may not think very clearly and say that I will send two people to try first. I will try one country and then another country, but the overall strategy is not well thought out. In fact, a lot of costs need to be spent in terms of compliance, market research, and R & D investment.

If the domestic economy is not prosperous, it is actually a worse situation. So I think it should be tried. I myself maintain a cautiously optimistic attitude and think it should be tried because this is how we got started. But for every different industry, how to do it should actually be carefully considered. At the same time, it cannot be unchanged, and it cannot be rushed out blindly. This is actually two extreme situations. So everyone should have some methodologies, and then say where we are going to develop and how to develop. I think this would be better.

Wang Huan (Host):There are many factors to consider when going global. But when determining the general policy, we should respect the rules in the attempt and use professional means to solve these problems. From this point, I also want to continue to ask Mr. Wang. Many enterprises embrace going global in their hearts, but it will cause them a lot of uncertainties and concerns. It may also come from the geopolitical and cultural differences or uncertain changes in different regions of the world. Including the recent end of the US general election, and the new US leadership team will soon start their work. Under this big background, I would like to ask from your understanding, what kind of attitude do you think this change is for enterprises going global, is it an optimistic and positive factor, or will it affect the consideration of the entire enterprise's overseas layout?

Wang Xin:I understand the problem you mentioned. The US general election has actually ended, and a new era is about to begin. We do not talk about what the value or impact of political reasons or political factors is. We should look more at what the industry is like. Because I am in a situation where we mainly provide technical services to large high-tech companies, including industry companies. Of course, for us, to a large extent, my customers will be affected. Last Friday, our A-share market dropped sharply. Maybe part of the reason is that Texas issued a message that it will not allow investment in Chinese enterprises or in the primary or secondary markets. So I think it should be looked at case by case. If you are a semiconductor or high-tech company, what kind of method should be used, and sufficient preparation and research should be made. I think this is very important because it is an event that is about to happen and is highly probable, and it is already a definite thing. So I think it should be divided by industry.

Second, I myself have a relatively cautiously optimistic attitude. As mentioned earlier, including the two previous sharing guests, we divide it into, for example, the United States, Europe, and Europe is divided into east and west. Maybe it is not very rigorous to say so. In Southeast Asia, the population density is relatively high and the purchasing power is strong. We divide the global into several large tracks. You must do a good job of full investigation on which market you are going to. So from our company's perspective, before 2019, our earliest overseas company should have been established in 2005. But after 2019, we have successively established our own branch companies in Indonesia, Malaysia, Vietnam, and the Philippines in Southeast Asia, and around 2020, we also established our own branch companies in the UK and Spain. I think this is what everyone mentioned. Whether to continue globalization, or to re-globalize, or to go against globalization, it depends on what the value is, and then we make a distinction. We view the entire market, including the impact of the US general election and geopolitics on us, with a cautiously optimistic attitude.

Wang Huan (Host):Mr. Zhong, what is your attitude towards this problem, and from this perspective, what preparations do you think enterprises should make in advance to deal with these?

Zhong Yi:In fact, I quite agree with Mr. Wang's point of view. As a service-oriented enterprise, from the experience of being with cross-border going global enterprises for so many years, I particularly appreciate a view: No matter how the market environment changes, the goal of those who want to make money will not change. With such a firm goal, then analyze how to make money. The person in charge of MINISO mentioned a point that I agree with, called Glocalization. In fact, in our view, many Chinese enterprises have reached the stage of Glocalization. It may be different from just going global online through platforms such as Amazon in the past. Now everyone is starting to pay attention to the offline market, really feeling the local consumer market and seeing the goods and emotional values that local consumers need. The overall poor global economic environment makes people return to the essence and common sense, and consumption is also more rational. But when people return to rational consumption, they also begin to try to obtain some spiritual value. Secondly, we also see that when many changes come, some lessons can be avoided by spending money in advance. Where is the money spent? On compliance, taxation, legal affairs, and other levels. Find local consulting companies, legal advisors, compliance and tax experts, etc., to plan and deploy in advance, and be well prepared in all fields. So as not to let the business run, but in the end, some things catch up slowly. Especially in the fields of taxation, compliance, and intellectual property rights, not planning in advance may cost a higher price. Everyone should plan and prepare in advance in these aspects.

Wang Huan (Host):I believe that these suggestions, especially making plans in advance, understanding the market in advance through professional means, avoiding risks, and strengthening compliance, are very basic but very important requirements and preparations in the process of Chinese enterprises going global.

May I ask Peter, as we just mentioned, the cooperation between Hungary and China is very much anticipated. Under the background of going global, what good policies or unique opportunities does Hungary have at the government level that can be shared with our Chinese enterprises, so that Chinese enterprises can find a better space for development or better integrate into the entire economic and trade of Hungary?

Peter:Yes, thank you. So as I mentioned last year, Hungary has become the largest investment destination for Chinese enterprises in Europe, with as much as 44% of Chinese enterprises' investments in the EU being realized in Hungary. I believe there are many reasons for this. I have already mentioned the good bilateral relations. But I think a large part is played by the good investment environment in Hungary.

First of all, Hungary is in a very advanced position in the world, in the heart of Europe. We have good infrastructure, and we also have a relatively cheap but well-trained and flexible labor force. So Hungary is an ideal entry point for all Chinese enterprises whose goal is to serve the vast EU market with their products and services. We also have a very open business environment, which has many benefits for investors. This is because our government is committed to simplifying business processes and reducing bureaucracy. For example, it is very fast and easy to establish a company in Hungary and apply for different summits. We have a very good tax environment. So our current corporate income tax rate is the lowest in the entire EU, with a uniform tax rate of 9%, and Hungary is the only place in the EU with a single-digit tax rate. Finally, I would also like to mention our subsidy system. We provide a wide range of different investment-related subsidies for Chinese investors. Cash subsidies are different forms of tax relief, including many different forms of subsidies for investments in the infrastructure around the factory, especially for R & D-related projects, or projects with high added value to our economy.

Wang Huan (Host):I understand what Peter shared. Hungary currently has a very good geographical advantage in Europe because it is in a very convenient transportation center in Europe. Therefore, after Chinese enterprises enter Hungary, they can better integrate into the European market. In addition, there is also a relatively open government business environment, a good tax policy, and targeted tax relief. These are policies and requirements that Chinese enterprises are very concerned about and are indeed very