Chinese companies aren't winning overseas just because they're cheaper, Goldman Sachs says.

Chinese companies aren't winning overseas just because they're cheaper, according to Goldman Sachs, challenging one of the biggest assumptions behind China's export boom.

But Goldman found Chinese products often become more expensive after entering foreign markets, partly as their quality improves, while price cuts tend to come later as established rivals fight to defend market share.

The finding challenges the view that Chinese firms win foreign markets by relentlessly undercutting rivals on price.

China's weak domestic demand and years of deflationary pressure have also fueled concerns that its exporters could push down prices overseas.

Goldman analyzed 11 sectors and 40 Chinese and global companies to study where Chinese firms are gaining market share.

Chinese products typically enter new markets at about a 30% discount to incumbent rivals, but prices often rise in subsequent years.

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Chinese companies often raise prices as their products improve without losing their price advantage over competitors. Chen said the discount versus competitors generally remained stable.

Robot vacuum cleaners show an even more dramatic shift. Chen said Chinese products in the category entered the US market at around a 40% discount but now command a roughly 60% premium as manufacturers continue innovating and adding new functions.

Instead, price cuts often come later, when established competitors struggle to defend their positions.

Chen said Chinese companies tend to gain market share fastest in modular, consumer-facing, high-growth products.