CES 2025: Chinese Companies Weather the Storm Amidst Fierce US Market Competition

CES 2025: Chinese Companies Weather the Storm Amidst Fierce US Market CompetitionPresident-elect Donald Trump's previously announced plans to impose new tariffs on imported goods, particularly from China, did not significantly dampen the enthusiasm of Chinese companies participating in the 2025 Consumer Electronics Show (CES 2025). Held in Las Vegas from January 9th to 12th, the show attracted approximately 4,500 exhibitors, with over 1,200 from China a number largely consistent with the previous year

CES 2025: Chinese Companies Weather the Storm Amidst Fierce US Market Competition

President-elect Donald Trump's previously announced plans to impose new tariffs on imported goods, particularly from China, did not significantly dampen the enthusiasm of Chinese companies participating in the 2025 Consumer Electronics Show (CES 2025). Held in Las Vegas from January 9th to 12th, the show attracted approximately 4,500 exhibitors, with over 1,200 from China a number largely consistent with the previous year. This demonstrates the continued commitment of Chinese electronics companies to the US market, which remains crucial despite potential challenges like tariff increases and technological sanctions. China remains the second-largest supplier of goods to the US, after Canada.

TCL, a sponsor of this year's CES, had its logo featured on the back of 150,000 attendee badges, highlighting the significant presence of Chinese companies in the global consumer electronics sector. However, the potential for trade friction has prompted many Chinese businesses to adjust their strategies. The "China + 1" strategy, involving establishing factories in both China and overseas locations to diversify risk, has become a popular approach.

A company from Xiamen exemplifies this. This manufacturer, which primarily produces over-the-counter hearing aids for American brands (with 80% of its revenue coming from the US market), established a second production base in Malaysia to mitigate potential tariff risks. They also set up a distribution and repair center in Minnesota to reduce the increased costs associated with shipping repaired products back from the US due to tariffs. The company's sales director noted, "Our customers are more worried about the future and often inquire about our contingency plans," reflecting the anxieties surrounding supply chain stability and market risks in the current geopolitical climate.

Another router manufacturer, despite rumors of a potential US ban due to security concerns, chose to participate in CES, showcasing its latest security cameras, home security systems, and consumer-grade routers. A spokesperson emphasized that while the company originated in China, its global headquarters has relocated to Irvine, California, and highlighted the superior hardware security of its products due to in-house manufacturing, predominantly based in Vietnam. This demonstrates a strategy of mitigating risk through globalized operations and technological advantages, while simultaneously striving to enhance competitiveness in the US market.

A Chinese company specializing in smart lighting adopted a different approach, focusing solely on sales outside of China. Its marketing director stated that despite manufacturing entirely in China, they weren't concerned about tariff increases. "We still prefer manufacturing in China as it allows us to maintain stricter control over product quality," showcasing the strategic balancing of cost, quality, and risk.

However, some Chinese exhibitors faced another regulatory hurdle: their reliance on US-based AI models that lack approval in China. While the US government hasn't banned OpenAI's services in China, OpenAI suspended access to its API for developers in mainland China, Hong Kong, and Macau in July of the previous year.

One company from Zhongshan launched a voice-controlled mouse integrating ChatGPT and Dall-E. Its founder, seeking US distributors at CES, believes American consumers are more familiar with AI, presenting significant market potential. To circumvent restrictions on using ChatGPT, the company established a subsidiary in Romania, enabling the integration of the chatbot functionality within the mouse software. For Chinese consumers, the software allows users to select either a US or Chinese AI model, although the specific model names are concealed. "I'm combining AI technologies from both countries to show customers the differences in their responses," she added. This voice-controlled mouse saw remarkable success in the Chinese market, with the initial 2,000 units selling out within three days, demonstrating agility in technological innovation and market strategy.

Another Chinese educational company integrated ChatGPT functionality into its products, but only for markets outside China. This week, they announced an AI-powered tablet featuring ChatGPT capabilities to assist children with math problems and writing skills. While this tablet has been sold in China for the past two years, it previously utilized a domestically developed AI model. The company's President and CFO stated their long-held aspiration to serve global markets, believing there's no fundamental difference in educational needs between the US and China. "Parents and students share many commonalities in facing challenges and pursuing goals," he said, highlighting the company's use of AI technology to expand into international education markets.

Despite the significant Chinese presence at CES 2025, the scale could have been larger. According to Chris Pereira, who provides training for Chinese companies exhibiting at CES, approximately half of the roughly 40 Chinese clients he works with had their US visa applications rejected. Pereira, who runs a consulting firm advising Chinese businesses on overseas expansion, stated that reasons for rejection weren't explicitly given. This marked the first time in his years of running training courses that hed seen such a large-scale visa issue for his Chinese clients. "Even with official CES welcome letters, entire teams or even the whole company have been denied entry," Pereira lamented. This situation garnered significant attention from Chinese media, and ultimately, many clients secured visas by reapplying through other US consulates in China.

A CES spokesperson acknowledged the visa denials and stated that they are communicating with affected companies to better understand the issues and provide assistance. The spokesperson added, "While we cannot directly influence visa processing, the Consumer Technology Association (CTA) encourages the US government to expedite the process and facilitate visas for individuals traveling to the US for legitimate business purposes."

In conclusion, CES 2025 showcased the complex landscape faced by Chinese companies in the US market. While they demonstrate strong innovation and market-opening spirit through active participation in international competition, tariffs, technological sanctions, and visa issues present considerable challenges to their internationalization. Chinese companies are actively adapting strategies and exploring solutions to ensure competitiveness and sustainable development in the global market. This is an ongoing evolution, and the future trajectory of Chinese businesses navigating this complex international environment warrants continued observation.