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Perspectives: China's global expansion - the role of CFO
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Chinese companies are rapidly expanding on a global scale, leveraging technology, innovation, and strategic internationalization. In this episode of HSBC Global Viewpoint, Zhenyi Tang, Executive Vice President and Head of Banking, HSBC China, speaks with Sean Song, CFO of Mobvista, about the driving forces behind this trend. They explore how Chinese enterprises are using technology to gain a competitive edge, the role of financial partners in global growth, and the importance of diversification in navigating geopolitical challenges.
This episode was recorded during HSBC’s International Day in Singapore, where global business strategies were a key focus.
Disclaimer: Views of external guest speakers do not represent those of HSBC.
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Transcript
Introduction to Global Insights
00:00:00
Speaker
Welcome to HSBC Global Viewpoint, the podcast series that brings together business leaders and industry experts to explore the latest global insights, trends, and opportunities.
00:00:12
Speaker
Make sure you're subscribed to stay up to date with new episodes. Thanks for listening, and now onto to today's show.
00:00:22
Speaker
Hello everyone, ah welcome to the latest episode of Extraspecies Perspectives, the podcast series where we explore trends shaping international investment landscape.
00:00:34
Speaker
I am Zhang Yitang, the Executive Vice President and Head of Banking, Corporate and Institutional Banking, Extraspecies China.
Chinese Companies' Global Expansion
00:00:43
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And we have the pleasure to have Mr. Sean Song to be here with us.
00:00:47
Speaker
Welcome. Thank for having me. This podcast is recorded in Actorspecies International Day in Singapore. So the main discussion will be focused on how we see the Chinese companies developing internationally and how they are bringing the best the technology with an expansion globally.
00:01:07
Speaker
Thank you. So let's get started. Yeah, sure. yeah So, Sean, definitely we see a clear trend globally that you know the Chinese companies are really expanding rapidly on a global basis. so And in China, we have a saying that no global, no survival. fuu had jo fuu So how how do you see this trend? And do what do you see the behind this you know important trend globally?
Innovation in China's Internet Industry
00:01:33
Speaker
I think it goes back to the culture of China. it' ah Historically, it has a lot of people. It perceives it very strong country, but actually it has limited resources compared with large population.
00:01:48
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ah And secondly, I think this is relatively new, that consumerism that was brought to China in the last 20 to 30 years. So this combined,
00:01:59
Speaker
brings the real drive to China, Chinese society and Chinese people to going forward. I want to be successful. So I think this is very important. I understand that in a lot of people using the word like involution and everything, this is key, but this is maybe maybe this is not the first principle.
00:02:18
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I think if look at it like know, to say in China, people who have this community and this kind of sense that they want to grab opportunities and really want to be successful.
00:02:30
Speaker
So, and a lot of people there in this market, it's a very good like a testing ground for whatever comes to bring up to the market, whether it's a service or it's like a product.
00:02:45
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And the reason that lot of people want to bring new things into the market or the society really drives everything. Our industry, because we are more focusing on the service side, we are on the internet industry.
00:03:00
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So there are lot of new things happening. I mean, it is could be more challenging, but of course this has been some new trends in this industry. But i think Internet is relatively like people in China or in other countries are competing on the same level.
MobVista's Global Strategies
00:03:18
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And I think this also can ah be a very, very interesting place that people in China can be successful in their own ways. And then the export is kind of successful elements to other parts of the world.
00:03:31
Speaker
I think this is why what I witnessed in the past 10 to 15 years. I totally agree with that and this is in this trend this's not an only trend, this is the fact has been there already and we definitely see it developing towards a kind of very positive way.
00:03:47
Speaker
And of course for MobVista as a listed company based in Asia and you are using the your mobile advertising and the digital marketing platform to help many many developers to acquire new users. So I'm sure you also have your your own international strategy. Can you share with us some of your insight on that and how you are doing that on the international strategies?
00:04:14
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Yeah, sure. I think like first of all, differentiation is very important. If this is ah very interesting and lucrative industry, there will be a lot of competitors.
00:04:26
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So you can either identify yourself, companies that are making the same product and their services, and also maybe you can focus on other things. I think being like a Chinese company in this market, which a lot of our customers are, they can be very interesting in developing some of the apps.
00:04:47
Speaker
I can give you example, which is, you know, I was visiting our US team like two months ago. yeah So I was there, like trying to, you know, being the CFO of the company, trying to bring up the P&L, right? So that was the course I was there to like say, why don't you travel to like in the States and meet your clients and you have a lot of budget coming to me. You need to come into Asia, countries like China and like Vietnam and these kind of places.
00:05:16
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And my sales director over there told me that Of course, there have there is like a very vibrant like no gaming ecosystem in the US.
Mathematics and Technology in Gaming
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like They have like EA, which has also been in the news lately. They have a lot of great games like GTA, right?
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But also, they found a lot of like know mobile games that are developed in Asia. And one of the reasons there is this that it is very, it's it's kind of easier for them to find talents with a very good mathematical aptitude.
00:05:53
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And I was wondering why this is relevant. ah So she told me that because some of the mobile games, behind them there are a lot of mathematical algorithms. Yes.
00:06:04
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Behind that to make games more interesting. yeah Those algorithms will identify whether the gamers will get bored with the game or they'll find it interesting. And there are a lot of places, of course, when they identify this opportunity or this moment that some of the gamers want to buy some weapons. So this is coming down to how math works.
00:06:29
Speaker
So this is very interesting. like and I was i was like impressed by the diversity of like different people in different areas. They have their own way because because like you know they are like the very great games, like even legendary games developed in the West.
00:06:41
Speaker
They're also like people they can do their own thing. So this is one thing that we need to remember that in this particular place like Asia or the greater China china area, there are a lot of opportunities because people have very different backgrounds.
00:06:54
Speaker
So this is one example that I can show to you. yeah yeah Thank you. I think really, you know, when you are talking about how to develop your business globally, I definitely see the importance of technology, which really can enable the whole ecosystem of your company. yeah And this is thiss not alone for MobVista, and also we see many Chinese companies are really you know using the modern technology to enable themselves and bring the best ecosystem to their clients, to the supply chain.
China's AI+ Initiative and Adoption
00:07:30
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And and so based on that, do you see the technology development in China?
00:07:37
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has given our ah Chinese enterprises in their journey to go global, give them a kind of a very good advantage for them to to compete globally.
00:07:48
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How do you see that? Oh, definitely. The road of technology. ah I mean, I think this is part of a larger puzzle, being interactive. with this market for quite a long time. So we all know that China way of doing things, one of the strengths is that they make real long-term plans. yes so and And this is really new. I think there's a new industry from the central government of China, it's called AI+. plus no So if you look at the details of this plan, which is fascinating,
00:08:22
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Because I know that people are discussing about like, you know, AI they developed in the u They have great models, right? They have like, they're leading the way, they're chips, everything. In a way, in a sense. In a sense.
00:08:37
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There's other ways to look at it. For example, like if you look at adoption. So I think in adoption is going to be another matrix to assess whether AI will become very positive in you know markets or in lincoln society. So look at this plan.
00:08:56
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So by 2030, the plan says it aims to bring 90% of penetration in all kinds of sectors. And even like in two years time, 2027, it says you will bring like 70% in key, some of the key industries. right So i think and this is also very interesting or like you know important, a very strong way of China doing things. And a lot of companies or startups can benefit from that. This creates new opportunities, even vibrance into this industry. So the adoption rate is very important. So I think this applies to a another and another aspect of technology being adopted in China, not just AI, other things that- A broader way. broader way, course.
00:09:45
Speaker
But another thing I think it is, which which is also very, very interesting is that other than making long-term plans, The Chinese companies, they're also trying to be very fast. yes You and me both know there's like like this kind of phrase from the you know the volleyball, women's volleyball time is called short, flat and fast. um yeah dumping gui yeah Yeah,. And this is also another way of looking at adopting technology,
Role of Financial Partners in Growth
00:10:10
Speaker
right? Because are always like new technology over there, the first principle way of doing things, but there's always we need to have companies on the ground adopting those technologies.
00:10:22
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So that's something like we have a very, very a kind of drive in China to adopt those kind of technologies. yes I think combined with long-term plan, that is something like you know a lot of companies can tap into when they're looking into this market.
00:10:36
Speaker
Yeah, I mean, talking about the technology, maybe we can just you know have one one more a step ahead. So there are many, many technology segmentations, industries. so So can you just like list, like for instance, the top three tech industries that China are leading? And from your CFO perspective, how are you going to take the opportunity and ready to capitalize on it?
00:11:06
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Yeah, sure. In China or with your own company, for instance. I think there's lot of news coverage on that. a So EV, of course, like drones, these are very like an off top and behind. This has been, I think and this benefits from like a very, very solid manufacturing base in China and the Chinese way of developing very sophisticated technology, based on just the being like a manufacturing base for other companies.
00:11:34
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But also I believe in our in our industry, which is the internet, like China is leading in its own way. I mean, of course, like i think Silicon Valley is it's it's leading like, you know, globally, of course.
00:11:49
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But if you look at many great companies like Alibaba, reason there's like a ah lot of talks about this company. yeah and they are very focusing on the e-commerce side. you know it's I just watched this late Jota interview in this also like very famous All In podcast. So they said they're very focusing on the e-commerce and the cloud.
00:12:12
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I think being somehow in that ecosystem by ourselves, ah we we'll look at that and feel very excited because one of the largest who benefits from this trend is the financial sector. yes Because like, you know, i guess exactly, right? Especially for all like e-commerce, right? Because it's like is is' very difficult for just using pure technology to do cross-border payments.
00:12:39
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But also, it very, very important for the banks, financial institutions spanish institutions to navigate through this kind of compliance and and also regulatory regimes.
00:12:52
Speaker
And also, i think in the future, that the cloud also mentioned. I think that is also a very, very interesting perspective of looking at that. Because like banking partners, they're running, I think the one largest cloud cluster, right? I mean, data guest yeah, exactly. you know more and more there And there are complaints about like delays in this payment system here and there.
00:13:14
Speaker
and combined with the latest like cryptos and this kind of development like the stablecoin and combined with cloud technology, I think that is going to be very, very exciting. Yes, indeed. So talking about really the financial partners, you know, now again, thank you for coming to this event of your financial partner at HSCBC. And so I'm sure along along with your internationalization journey,
00:13:42
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and the technology is one important weapon or tool that you are using. On the other hand, you know the fin
Banking Evolution and Customer Focus
00:13:50
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financing part is quite important as well, and meaning the financial partner that you are engaging with are kind of very important to you. So as a CFO, so how do you see our financial partner's role in, for instance, in helping the companies whether the storm, you know, to bring operational efficiency, everything. How do you see the importance of our financial partners to you?
00:14:15
Speaker
Well, I think this is, so I've been working with a lot of banks. yeah And I mean, I think one thing in common that especially large and successful banks, they're very proud of their like a risk system, I should say. It's like, no, they are... Risk control system. Yeah, risk control system. and And they are very proud of being, not saying like conservative, but they want to see things that that are proven.
00:14:43
Speaker
And also they also, they want to bring things to the regulators. I think this is good because like you know this is the way to like you know one of the path to ensure you can run the bank for very long time.
00:14:57
Speaker
But at the same time I do feel there's a lack of interest in some of the banks. to be structurally innovative. I mean, from like, you know, a member of the internet, we never say because we are one thing, we cannot be the other.
00:15:19
Speaker
So, I mean, i was kind of amazed by how your bank, HSBC, while being probably one of the largest standing bank, you know, globally, but at the same time, there's always this kind of unsatisfactory kind of mindset. Because i was asked by, to basically more than and other banks that where I'm not satisfied. And also like, this is not just like a lip service and being working with, let's be seen for more than 10 years, there's constant change.
00:15:57
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I mean, and people with different backgrounds. Some of them, end they're from like industry background, some of them, they're even from like product background. Some of them from like being ex-risk officer,
00:16:11
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but many of them, they will be coming to the front desk to interact with the clients. And there are like structural changes behind everything. There words like sandbox, everything, of of course. But you know I think this the execution level, I was amazed at being in this bank. Because I'm running a company, I'm i'm on a CFO side. i'm like the risk guy, you know. you know i I understand that sometimes the company being larger than Prestige started up, they needed this kind of bureaucratic kind of way to make things working and also make things in line.
00:16:46
Speaker
But I think that the tricky part is how Well, we maintain that, yeah but not lagging behind, and keeping pace with the industry evolution. This is, this is i think, it's one of the things that look into banking partners. Thank you. thing I do appreciate appreciate your your comments, really. and To me, this is really the core principles of Azure SBCs existing in this world for like 160 years already.
Geopolitical Risk Mitigation
00:17:15
Speaker
First of all, we are really customer-centric.
00:17:18
Speaker
And secondly, we're not only looking to the client itself, but also looking to the client's industry. And meanwhile, we make ourselves evolving along with the development of the economy of of different industries, which is ju-ching.
00:17:34
Speaker
yeah This is something really we see has been existing for a long, long time. yeah and I wouldn't say that for 10 years. Thank you, thank you for that. Back to our internationalization story, and we see more and more companies, Chinese companies going global. and But needless to say that we see some of the kind of in the storm, you know, in the regarding the ah the the geopolitical situation, or for instance, the trade tension, etc. So, a lot of the Chinese clients are using the strategy of diversification in their international journey. I'm sure this is the same with with your company as well. So, how's your feeling? how what's your sense on the the kind of diversification strategy to help you grow you know globally?
00:18:20
Speaker
Well, I mean, this ah question we always ask ourselves. We roughly were were a very young company, but we operate in nearly 20 countries. 20 countries. 20 countries.
00:18:34
Speaker
ah So how we can benefit from that? I think one of the examples is that the pilots, So ah ah I read through the report that it claimed to be that one third of the AI engineers are in China.
00:18:54
Speaker
ah So we we have a lot of ah Chinese engineers. They're very good. They are ah one of the reasons that we can do our business smoothly and successfully.
00:19:08
Speaker
But also, like we're also looking at the engineers in the West, particularly in Silicon Valley. right We compare those engineers. I mean, of course, China has a lot of population, so it's abundance in numbers. yeah But when it comes to like a addressing the real challenge, and there are...
00:19:32
Speaker
always these kind of ideas coming from engineers who received like you know their education in Stanford in the West. And because I think this is different kind of like education system that Chinese engineers, they are solid in the fundamentals.
00:19:48
Speaker
But when they're trying to address a new challenge, that they may not be very up to it because like they believe that they need to build everything grown up.
00:20:00
Speaker
and and But sometimes you need people to be crazy. This is this how you innovate sometimes. yes So I think I met with this company engineer who is also like you know born in China, but educated in the West.
00:20:14
Speaker
And he is like the most craziest, like the craziest engineer I've ever been. He's disobedient of the traditional way of thinking of things. And they they want to change everything. It's very difficult to do that. But, you know, sometimes you need this kind of mindset in your company so you can think of something that is not just trading competitors. Right. Also like a leading way. Talent matters. Exactly. So this is, I think this is sometimes, I also mentioned like the mathematical aptitude, like in just a few minutes ago. I think this is how you look at sophistication. Yes.
00:20:51
Speaker
and And of course there are other specifications, for example, like the payment system. Right? Exactly. Right. correct We are serving this industry, especially serving what is small and medium players in this industry.
Global Payment Systems
00:21:04
Speaker
And because we believe they are underserved somehow.
00:21:07
Speaker
ah So, ah of course they have very, very new ways of building their products, but they also like it have different not like like ah novelty in in in how they can pay us. it's like you know this So it is very difficult for you to find, like you like two to three years ago, that a vendor can handle some of the like stable coin payments,
00:21:31
Speaker
but it's easier for you to find it in different kind of other countries, for example, like Singapore. yeah So I think this is also the way how to structure your business, because it's like a payment system can be really key. yeah It sometimes determines who we can work with or who you cannot.
00:21:50
Speaker
And also, like, you know working with a solid payment vendor, it's like derig some of the business because payment can be messy. yeah yeah So these are two examples. then So I do encourage like these days people have this kind of mindset tribalism. It's like I belong to certain parts of the world. i but that apollable I'm not used to that. I mean, I live in Singapore. I also like you know live in Hong Kong.
00:22:17
Speaker
And I do witness like people and companies, they don't like how things operate locally. They are from different kind of yeah culture, background. I think that is something we need to address. yeah We need to welcome this kind of differentiation, different different kind of way of doing things, and making that part of the strength of a company. So I mean, if you travel different countries and you have this kind of optimistic view, yeah whenever you meet with this kind of different approach, I think that will bring like new energies into the business when you're trying to run global one.
00:22:55
Speaker
Yeah. Talking about the new energy, really, now we are in Singapore, you know. yeah So do you do you ready or are you ready to really to use the international hubs like Singapore, Hong Kong to really, you know, develop further develop your business under this diversification strategy? Hong Kong, Singapore, they are not just friendly to the international business, and they are very well managed places. Yes, slices totally agree. And they like upheld international standards of law rule of law.
00:23:27
Speaker
and they have a very good financial system and judicial system that boosts the confidence of your clients and your partners.
00:23:38
Speaker
ah So this is very important. i mean I mean, when you are running a larger business, There are requirements for your company to be getting comfortable with not just working with your partner's clients, and also trying to work things out with them when there's a difference between. I mean, these two places, they have a lot of case of resolving previous, like I mean, like litigations or kind of issues.
00:24:10
Speaker
And also, the institutions in those places they will tell you the right way you know of how to do things there. Especially for a young company, you need to learn from some of these institutions. A lot of successful and unsuccessful businesses. Exactly, exactly. yeah exactly yeah And also like for something like Singapore, Hong Kong, I think they're representing like ah corridors for you to be successful in the East and the
Strategic Hubs for Expansion
00:24:37
Speaker
West. Yes.
00:24:38
Speaker
And the bridge. Exactly, like the bridge. so so So that's why we have a lot of investment structurally in these two places. And also like me, like being the management, one of the so management of the company based in Singapore and already like several years.
00:24:58
Speaker
And I think we benefit a lot from that. Great, yeah great. And I totally agree with you. These are some of the the the benefit of by you know leveraging the ah advantages of these international hubs for our companies you know to further fast develop globally. but This is a smart way to do that.
00:25:18
Speaker
And maybe the found final question really is about China. So how do you see the confidence from your industry, from your company,
00:25:29
Speaker
to see the future development of China, especially on this very important juncture in time. So I think there's a new framing in the West that people are saying that ah the Chinese way is of the engineering culture.
00:25:48
Speaker
There's like a new book by you know ah Mr. Dan Wong, it's called A Breakneck. Red Book is is fascinating. So it describes how things engineered, not just about a company, but the whole the hop on the policy level, that to build up things and have a very clear goal.
00:26:10
Speaker
That's how comes to the plans we have in the last couple of decades. ah I think that is going to be, in the long run, something is going to further boost the economy.
00:26:24
Speaker
We have a lot of confidence in that. ah At the same time, i mean I think the China way of developing its own policies, I think so the the many things that be wrongly perceived, I mean, maybe not wrongly perceived, it's like you know people do look at things going back and forth.
00:26:49
Speaker
Different angles. Different angles. There are a lot of talks about being unpredictable. if you are doing business in China. I think being a participant of that market, i'm I'm not going to say this is not true, but I'm not going to say there are more occasions, they are like in the prevailing sense of time, that the policies are predictable.
00:27:11
Speaker
I think that's one reasons why a lot of, still lot of financial institutions, they are very interested in investing in China. Yeah. Well, it is, I totally agree with you, you know, for those who said, okay, things are not very predictable, I think they are maybe not doing the homework. Exactly. Good enough. Exactly. If you're really in know deep rooted in in the country and understand that the system and follow the follow the market trend and really understand the entrepreneurs' resilience and that people's religions, then you will find this is still a very, very good market it with huge potential. And don't forget, this is the second largest world economy in the world.
Conclusion: Future Outlook and Collaboration
00:27:49
Speaker
Exactly. we plenty of things to do in this particular market. Because this is like...
00:27:53
Speaker
From the first principle, if you want to engineer something, you need to have predictability, right? You need have a roadmap and everything. So the claim that like that is, I think, fundamentally go against that kind culture, which I don't think is true.
00:28:09
Speaker
Yeah, correct. And the thank you, thank you, Sean. I think we have discussed a lot of interesting topics and very important topics. And thank you very much for coming to Extraspecies Perspective. And and for those those audience who are you know listening to this, thank you very much. And we're looking forward to a more successful cooperation between MobVista and Extraspecies, and we sure your business and your career a much, much successful one in the coming future by leveraging all the resources, all the platforms that we have and in between, extra species is more than happy to help and to to assist in any ways as we can. Thank you very much, Sean, for joining us.
00:28:52
Speaker
For those audience, thank you very much for the listening. Thank Thank you. It's a great pleasure. Thank you for joining us at HSBC Global Viewpoint. We hope you enjoyed the discussion.
00:29:03
Speaker
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