CITIC Securities: Three new trends in Chinese companies going global will support the growth of exports.

CITIC Securities pointed out that as the domestic economic growth slows down and trade frictions continue to escalate, since 2015, Chinese companies have increased their demand for going global. In the first phase of Chinese companies going global, enterprises mainly responded to the impact of tariffs through four ways: re-export trade, changing export destinations, transferring production capacity overseas, and upgrading technology, with each method applying to different product characteristics. However, since the start of Trump's second term, tariffs have entered a "chaotic era" with higher levels, broader coverage, and reduced predictability. Chinese companies need to build a more resilient and efficient framework for going global. Changes in the internal and external environment will guide Chinese companies in entering the 2.0 era of going global. On one hand, going global is still an important way for enterprises to deal with tariffs, but standardizing re-export trade and diversifying regional layouts are two new trends. On the other hand, "going out" is not the sole response strategy, as high-tech products with rapidly increasing domestic production rates can gain enough price advantage to counter the impact of tariffs, and some traditional products can try domestic gradient transfer, improve technology to reduce costs and increase efficiency, and actively explore export markets in Belt and Road countries. From a macro perspective, the three new trends of Chinese companies going global will support export growth, with the acceleration of going global, technological progress, and diversification of trade layouts collectively forming a central driving force of 3-5 percentage points for export growth. In the second half of the year, China's exports are still expected to achieve positive growth of 2.5%.