(Yicai) Nov. 14 -- Foreign banks are becoming more and more important in helping Chinese companies going global to address challenges such as cross-border capital flow and loan financing, according to the president of the Chinese branch of Deutsche Bank.

Cross-border payment and cash management capabilities are key factors that can assess banks' ability to serve Chinese firms overseas, Leo Yin told Yicai. "When companies go global, they need to address the 'last mile' issue, which mainly focuses on information and capital flow, involving financing, foreign exchange risk management, and cash management."

Yin, who was appointed president of DB China in December last year, has more than 20 years of experience in cross-border financing management. He is also the head of DB's global corporate coverage for China.

The inherent motivation for China's industrial upgrade and the natural development of the market have driven Chinese enterprises to expand globally, according to Yin. This is an inevitable trend following the enhancement of companies' capabilities within their industrial chains.

Yin believes the history of Chinese enterprises going global is divided into two main stages. The first stage, before 2017, was dominated by companies in commodities, engineering contracting, and energy resources, whose primary objective was to establish overseas business channels.

The second stage, from 2020 onward, sees leading companies in high-value-added industries, such as new energy vehicles, biomedicine, and fintech, venturing abroad, focusing more on localized operations and sustainable development in overseas markets.

"After this evolution, Chinese enterprises overseas have achieved a breakthrough from quantitative accumulation to qualitative transformation," Yin explained. "Moving away from a model primarily focused on short-term profits, they integrated into the global value chain system, and localized operations and sustainable development have become their core strategies."

The footprint of Chinese enterprises going global continues to expand, with emerging markets gradually becoming key hotspots for their overseas presence, particularly Southeast Asia, the Middle East, and Latin America, Yin said.

"More and more clients are actively conducting business in Southeast Asia, with Africa being another key area of focus," Yin noted. "Chinese enterprises are integrating more deeply and serving the local markets."

For example, Chinese electric vehicle brands have successfully entered the Thai and Indonesian markets, and some leading platform companies have begun localizing their operations in Brazil and Mexico.

Against the backdrop of ongoing reshaping of the global supply chain and tightening trade conditions, Chinese companies are accelerating their expansion into Southeast Asia, with the Association of Southeast Asian Nations offering an attractive new growth path for Chinese enterprises, Yin pointed out.

The future of Chinese firms abroad will gradually enter a third stage in which they become organizers of the global value chain, rather than merely participants, Yin believes. "In this context, foreign banks, including DB, will continue to play the role of ‌financial connectors ‌to support the advancement of this historic process."

"DB can leverage its expertise in cross-border solutions and services in financing, foreign exchange risk management, and treasury management to help its Chinese corporate clients effectively address the various complex situations they face in the region, reduce operational risks, and achieve more robust growth," he said.

Editors: Tang Shihua, Futura Costaglione