China's Soft Power Rise: What It Means for Our Business Strategy

For the first time in modern history, China has reached second place in the Brand Finance Global Soft Power Index 2025, earning a score of 72.8 and surpassing the United Kingdom. This is far more than a symbolic milestone. It marks a structural realignment in global influence — one that is reshaping international commerce, investment priorities, brand strategy, and cross-border collaboration.

For global business leaders operating in an increasingly multipolar world, understanding the drivers, risks, and commercial implications of this shift is no longer optional. It is becoming central to competitive advantage.

Why This Moment Is Different: A Market-Driven Soft Power Rise

China’s 2025 ascent is largely market-driven, built on consumer demand, commercial competitiveness, and global creative resonance.

Cultural Exports That Compete on Merit

China’s newest breakout successes show that Chinese-origin IP can win global audiences through creativity.

• Black Myth: Wukong surpassed 20 million sales, proving that Chinese mythology-infused content can compete with global AAA titles on quality, design, and storytelling.
• Ne Zha II grossed over 6 billion yuan, outperforming major Hollywood releases through universal themes of identity, morality, and family.

They are commercial hits born from market demand.

Consumer Brands Becoming Global Trendsetters

China is evolving from manufacturing powerhouse to culture-shaping brand builder.

• Labubu by Pop Mart sparked worldwide queues and resale markets.
• Heytea and Chagee are reshaping modern beverage culture across Asia and beyond.
• Songmont is redefining global perceptions of Chinese luxury craftsmanship.

These brands indicate an emerging shift: China is influencing taste, aesthetics, and lifestyle trends.

Technology as a Global Equalizer

China’s AI ecosystem is moving from follower to democratizer.

• DeepSeek’s cost-efficient AI models offer performance comparable to GPT-level systems at a fraction of the price, enabling wider global adoption.

This positions China as a provider of accessible innovation, especially for emerging markets and SMEs.

Strategic Opportunities Across Key Sectors

As China’s soft power grows, several sectors are poised to benefit:

Technology & Digital Infrastructure

China’s strength in affordable AI and digital solutions offers unique partnership opportunities. The key is crafting collaborations that balance cost-effectiveness with strong intellectual property protection.

Strategic focus:

• Collaborate on developing localized AI solutions for diverse global markets
• Create partnerships with Chinese tech firms that are global-first, rather than just China-focused
• Leverage China’s strong digital ecosystem for mutual growth in the global tech space

Consumer Markets & Co-Branding

The rise of China’s influential consumer market presents exciting opportunities for international brands to tap into Chinese trends and collaborate on products that resonate with global audiences.

Implications:

• Embrace co-branding with Chinese brands to enhance global visibility
• Create authentic collaborations rooted in cultural storytelling that appeals to both Chinese and global markets
• Design market entry strategies that align with China’s powerful consumer-driven digital ecosystem

Green Tech & EV Leadership

China's dominance in the electric vehicle and renewable energy sectors opens up lucrative opportunities for joint ventures, supply chain collaborations, and investments in sustainable tech.

Opportunities include:

• Collaborating on EV infrastructure and green tech, especially as global markets race toward decarbonization
• Co-developing affordable electric vehicles for both developed and emerging markets
• Investing in China’s renewable energy networks, with a focus on solar, wind, and battery storage

Entertainment & Intellectual Property

Chinese IP, having proven its commercial viability, offers new pathways for collaboration in the entertainment and media industries. Whether it’s film, gaming, or digital content, there’s room for more co-productions, licensing, and distribution partnerships.

Potential growth areas:

• Joint film/game productions aimed at both domestic and international markets
• Expanding global distribution channels for Chinese-origin content
• Developing cross-border content studios that combine global creativity with local Chinese insights

Navigating Complexity: Risk Mitigation for Global Firms

Despite China’s rising soft power, there remain reputation gaps—China ranks 27th in the same index for reputation, reflecting lingering concerns around governance, transparency, and geopolitical issues.

Practical Risk Management Strategies:

Enhance Due Diligence

• Strengthen IP protection mechanisms in technology partnerships
• Ensure data governance and privacy standards are rigorously maintained

Stakeholder Sensitivity

• Recognize that China’s influence extends beyond just business, cultural diplomacy is a key part of the equation

Cultivate Cultural Intelligence

• Build teams that understand both Western business norms and Chinese market dynamics
• Invest in cross-cultural training to better navigate these evolving business environments

Ethical Frameworks

• Place a strong emphasis on ethical AI development, data protection, and transparency in all collaborative ventures

People-to-People Exchange: A New Business Accelerator

China’s post-pandemic reopening and visa simplifications have fostered new levels of people-to-people connections. This is breaking down stereotypes and enabling business that builds stronger trust in B2B dealings.

With growing soft power influence, business executives now experience a more nuanced China, where mutual respect culture pave the way for smoother and faster transactions.

Strategic Positioning: Adapting to a Multipolar World

The 2025 soft power shift signals the growing importance of cultural engagement in trade and investment. Businesses that understand China’s expanding influence will need to adopt a multipolar mindset to stay ahead.

Strategies for Success:

• Embrace complexity: Recognize that China is one of many global centers of influence.
• Build cross-cultural teams that understand and respect local dynamics.
• Focus on mutual value: Design partnerships that create win-win outcomes, not zero-sum results.
• Invest in trust: Prioritize building trust in markets shaped by China’s soft power.

The Strategic Imperative

China’s soft power surge in 2025 is not just a passing trend. It represents a profound structural shift in the global order, one that will increasingly drive trade, investment, and innovation.

The question is no longer whether to engage with China, but how to do so in ways that create sustainable value. To succeed in the new multipolar world, businesses must combine strategic foresight, cultural intelligence, and open collaboration to navigate this exciting new reality.

As China’s influence grows, those who can balance risk assessment with genuine collaboration will find themselves at the forefront of global business success.