Strategic Opportunities for Chinese nterprises to Go Out

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  According to recent statistics, by the end of 2011, the total foreign direct investment of Chinese businesses had added up to 382.3 billion U.S dollars. Foreign direct investment flow of 2011 reached 65.1 billion U.S dollars, including 60.07 billion of overseas investments in the non-financial sector. Statistics of 2010 showed that Chinese foreign direct investment flow was the largest among developing countries and the fifth largest of all the countries in the world, exceeding the investment amount of such traditional investment powers as Japan and Britain for the first time.
  Chairman of the China Council for the Promotion of International Trade(CCPIT), Wan Jifei, said that in recent years, Chinese government and relevant departments have carried out a series of policies and measures to encourage and support Chinese enterprises to go overseas. Great efforts, such as improving the tax environment and adopting a more flexible foreign exchange control, have been taken to create a more favorable environment for domestic enterprises to go out. These measures have further standardized and streamlined procedures for enterprises to invest overseas and also enable these enterprises to effectively and efficiently respond to the changing market. Wan also believed that now China is ushering in an important period of strategic opportunities to open its door. According to the statistics, by the end of 2011, domestic Chinese investors have set up 18,000 outward investment enterprises in 178 countries and regions, amounting to 322 billion U.S dollars in non-financial sectors on an accumulative basis.
  Nowadays, more and more domestic enterprises are going out and many of them have grown to be influential multinational business giants in this process, making significant contributions to the recovery of the world’s economy. In the post-crisis era, profound changes are taking place in the world’s economic landscape, with environmental-friendly, low-carbon, and sustainable development becoming a common pursuit and a grand new global industrial chain coming into shape.
  Wan also suggested that, under such favorable external conditions, it is necessary for Chinese enterprises to aim their investment at proper areas and directions and accelerate the pace of going out. Three aspects should be given particular attention: first, increase input in emerging industries, such as the “green energy” industries, and form a scientific industrial layout in advance; second, explore more ways in investment cooperation. Enterprises should respect the objective law of development. Instead of pursuing the absolute control position, enterprises should eye the longterm benefits of capital investments and make full use of capital resources from both domestic and overseas sources, so as to achieve a win-win situation. Third, strengthen the management of overseas branch companies and enhance their operation level and awareness of risk prevention.
  Looking back in history, we may find that a regional or global crisis always ends up in reshaping the world’s economic landscape. However, the financial turmoil around the world also turns out to be an important opportunity for Chinese enterprises to invest overseas. China may grasp this chance to enhance its competitiveness and promote the upgrading of its industrial structure. Despite the fact that Chinese enterprises have made remarkable achievements in overseas investment, there is still a large gap between China and developed countries in foreign investment. This issue of Special report will discuss such topics as the government policies on the overseas investment of domestic enterprises, the current investment situations and risk preventions in overseas markets. The aim is to create a smoother road for more domestic businesses to start their going-out process.
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