Xu Jiaqi from Kingdee: The next stage of global expansion is a competition focused on AI management capabilities.

From individual export orders to overseas factories, Chinese enterprises are engaging in the global market in more in-depth ways.

According to the 2025 Statistical Bulletin of China's Outward Direct Investment jointly released by the Ministry of Commerce, the National Bureau of Statistics and the State Administration of Foreign Exchange, by the end of last year, Chinese enterprises had set up 58,000 entities overseas, covering 189 countries and regions.

While their global footprint keeps expanding, the challenges faced by these enterprises are also changing accordingly.

In the past, enterprises could secure growth opportunities by leveraging their advantages in cost, market access and policy support. Today, shifting trade rules, rising costs and increasingly stringent compliance requirements have made these advantages unsustainable. As overseas expansion evolves from product export to localized operation, enterprises also have to tackle tough issues such as cross-border supply chain collaboration, cost control and global business management.

Going global is only the starting point of globalized operation. How to translate market opportunities into sustainable profits is increasingly testing the operational capabilities of enterprises themselves.

Meanwhile, the development of AI technology has brought new possibilities to this transformation. As enterprises expanding overseas start to pursue efficiency improvement through internal management, can AI help them break down the information and management barriers in cross-border operations, and make the operation and management that used to rely on massive manpower far more efficient?

With these questions, we interviewed Xu Jiaqi, President of Kingdee International Holdings.

Inflection Point: From Arbitrage Dividend to Capability Premium

From Kingdee's experience in serving Chinese enterprises' overseas expansion, Xu Jiaqi observed that the focus of enterprises' going global has changed significantly over the past years.

From product export to production capacity export, and then to the current export of management systems, the demands of Chinese enterprises have gradually shifted from the initial export settlement and overseas production management to unified control and collaborative operation of global businesses.

This change is not only the result of the deepening of enterprises' overseas operations, but also closely related to the changes in the external environment.

In the past, Chinese enterprises could take advantage of the differences in labor costs, tax incentives and trade policies to seek new growth opportunities overseas. But now, part of the dividends that support these opportunities are shrinking.

The most intuitive one is cost. Starting from January 2026, Vietnam will raise the regional minimum wage by 7.2% on average. Although the local market still has certain labor cost advantages, if factors such as production efficiency, logistics and supply chain supporting facilities are taken into account, building factories overseas does not necessarily mean lower comprehensive costs.

Policy preferences are also changing. The 15% global minimum tax rule implemented in Vietnam makes some large multinational enterprises that meet the applicable conditions no longer able to fully enjoy the benefits brought by low tax rates as they did in the past. On the trade side, the United States has imposed higher tax rates on transshipment goods identified as tariff evasion, which also exposes some business models that rely on cross-border production capacity layout to obtain tariff advantages to new risks.

In Xu Jiaqi's view, Chinese enterprises' overseas expansion is undergoing a transformation from "opportunity-driven" to "capability-driven".

Opportunities are still important, but choosing the right market and building factories is only the first step of globalized operation. Whether an enterprise can make sustainable profits depends more and more on its own management capabilities.

This is also the new challenge faced by current enterprises expanding overseas.

The management experience accumulated over many years in China may not be directly replicated overseas. The fiscal and tax systems, labor rules and business customs of different countries require enterprises to adapt to local conditions; but as overseas businesses expand, the headquarters must strengthen unified management to avoid fragmented operation systems in different regions.

Excessive fine management may make local teams lose the flexibility to respond to the market; operating independently without coordination will easily lead to fragmented data, inefficient collaboration and rising management costs.

How to strike a balance between global unified management and flexible local operation has become a problem that enterprises expanding overseas must solve.

Solution: Unified Foundation and Local Capabilities

In order to help overseas enterprises achieve "global thinking, local operation", Kingdee has put forward the solution of "unified foundation + local capabilities".

According to Xu Jiaqi's introduction, under this idea, there is no need to redevelop a set of systems for each country. Instead, based on the unified product architecture and data system, localization capabilities such as LocalKits are used to adapt to the language, fiscal and tax, e-invoice and compliance requirements of different countries. In this way, overseas businesses can be incorporated into the group's management, while meeting the actual needs of local operations.

"Globalization solves the problem of whether capabilities can be replicated on a large scale, and localization solves the problem of whether customers are willing to actually use the products. Both are indispensable," Xu Jiaqi believes that localization is far more than translating the Chinese interface into the local language, but also involves in-depth integration into local business processes, user habits and service systems.

To this end, Kingdee not only needs to adjust products, but also establish local marketing, delivery and customer service teams in key markets, cooperate with local fiscal and tax, consulting and implementation partners, and deploy R&D capabilities close to front-line demands in some regions.

Zhejiang Haers is a well-known brand in China's cup and pot industry. When it replicated its domestic management experience to Thailand, it encountered problems such as BOI bonded material declaration and verification, multi-currency settlement, consolidation of statements under Chinese and Thai accounting standards, and tri-lingual tax declaration. The company plans to take Kingdee ERP as the foundation to turn compliance into system execution rules: write the bonded attribute into materials, warehouses and documents, restrict bonded materials to be stored in and out of bonded warehouses only, automatically bring the BOI identifier to customs declaration and sales documents, calculate value-added tax and withholding tax along with the documents, and keep accounts in parallel under two sets of Chinese and Thai standards. The first phase of the project was put into operation in 2023, and the second phase was completed in the first half of 2025, with a total annual production capacity of 30 million units. The base can now independently receive orders, conduct independent accounting and cope with customs inspections, with a revenue of 199 million yuan in the first half of the year, accounting for 12.67% of the total revenue.

For Kingdee, such practices have also accumulated product and delivery experience that can be replicated in other markets.

The development of AI technology is providing new possibilities for this globalization model.

The most direct change takes place in the market expansion link. In the past, entering a new market often required a lot of manpower for multilingual communication, demand analysis and customer service. Now, AI can take over part of the repetitive work, lower the threshold of language and knowledge acquisition, and help Kingdee reach and serve overseas customers at lower costs.

The more in-depth change takes place in the product itself.

Xu Jiaqi introduced that traditional ERP mainly runs according to preset processes, and business operations still rely on manual work. With the combination of Kingdee AI Suite and Kingdee Lingji, the system can now understand business tasks, connect enterprise data, call business processes, and independently complete some operations within the scope of authorization, while important decisions and exceptions are still handled by humans.

From product adaptation to customer service, and then to AI participation in enterprise management, what Kingdee is trying to build is not just a set of software that can run in different countries, but a management service capability that can be continuously replicated and adapted to local demands.

New Path: From Exporting Software to Exporting AI-enabled Management Capabilities

Following its Chinese customers to go global, Kingdee has gradually opened up the international market. But to gain greater development space, simply following customers to expand overseas is not enough, so Kingdee has begun to set its sights on local overseas enterprises.

In September 2025, Kingdee Qatar was officially opened, using the local market as the regional headquarters to expand the Middle East and North Africa market.

Different from following Chinese enterprises to go global, winning local overseas customers means that Kingdee needs to directly participate in local market competition and win customers with its product localization capabilities, delivery efficiency and continuous services.

The cooperation with Malaysia's Zhenxing Group is a typical case of Kingdee serving local overseas enterprises.

Zhenxing Group has businesses across 13 countries, covering building materials manufacturing, engineering construction, real estate and other fields. As its business expands, how to realize unified group control while retaining the operational flexibility of each business unit has become an important issue.

In August 2025, Zhenxing Group reached a strategic cooperation with Kingdee to provide a unified operation and management platform for its overseas businesses. The two sides plan to connect finance, procurement, supply chain and other businesses through a unified data and process system, and explore the application of agents in high-frequency scenarios such as AI quotation and expense review. Kingdee's local R&D and delivery capabilities deployed in Malaysia will help speed up demand response and product adaptation, so that the management experience accumulated in the Chinese market can be better integrated into local operations.

For Kingdee, this also means that the complex group management experience accumulated in the Chinese market is being tested by the local overseas market through products, localized delivery and joint innovation.

Xu Jiaqi said: "In the next three to five years, we hope to evolve from exporting software products to exporting management capabilities in the AI era."

This means that Kingdee's globalization is no longer limited to deploying mature products to more countries, but to build a continuously operating system integrating management experience, technical capabilities and local services. Products can be replicated, but the business environment, customer demands and organizational culture in different markets still require continuous understanding and adaptation.

In a sense, Kingdee and the Chinese overseas enterprises it serves are facing the same examination question: to enter the overseas market, they can rely on existing products and competitive advantages; but to translate market opportunities into long-term returns, they ultimately have to rely on the ability to continuously create value locally.

From "going global" to taking root in local markets, it is not just the expansion of market footprint, but also the re-establishment of operational capabilities. For Chinese enterprises and Kingdee, real globalization may have just begun.