Lenovo, TCL, and Huawei are well-known examples of Chinese high-tech companies that have established a global footprint. Beyond these headline-making brands, however, scores of high-tech companies—largely unknown outside China—are rapidly assuming market leadership within the mainland while quietly building the capabilities to go global.

China's high-tech sector is growing at an impressive pace. Over the past three years, revenues of its 100 largest high-tech companies grew by 26 percent annually, more than twice the overall market growth rate of 12 percent and nearly four times the annual global rate of 7 percent. Of these, nearly 20 midsize and large companies have grown at 50 percent or more a year—a remarkable pace for businesses of that size.

The rise of Chinese companies comes at a challenging time for the high-tech sector in the rest of the world. Slowing core markets and pressure from investors to increase earnings are forcing companies to turn toward China. Depending on the product category, 30 to 75 percent of future growth in the global high-tech industry will come from emerging markets, with China expected to generate a significant portion.

Foreign high-tech companies in China find themselves up against a host of challenges: limited demand growth in...