Highlighting China's role in global investment
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China came up with a plan that encourages domestic enterprises to 'go global' 10 years ago, and since then has become an active player in international investment, according to a top economic planner.
Although international investment as a whole fell 40 percent last year because of the financial crisis, China's overseas investments increased by 14.2 percent to $47.8 billion, Zhang Xiaoqiang, vice-chairman of the National Development and Reform Commission (NDRC), China's top economic planning agency, said.
Zhang made the remark at the second China Overseas Investment Fair, which opened Tuesday in Beijing.
He said that thousands of Chinese investors had established 13,000 companies in more than 170 countries and regions by the end of last year. The cumulative investment was worth about $246 billion.
There was a 10.4 percent increase in the nation's non-financial direct investment overseas in the first nine months of this year, amounting to $36.3 billion.
Chinese investors put money into more than 2,200 projects in 118 countries and regions during that period.
"The global economy has faced an extremely serious situation since late 2008," said Zhang, "and China's no exception. It had difficulties attracting investment and establishing cooperation.
"But, thanks to efforts to increase domestic demand and overseas business cooperation, the nation's economy is reviving and this has ensured rapid, steady growth."
The overseas investment of Chinese companies covers many sectors, but with mining, business services, finance, sales, transportation and manufacturing accounting for more than 90 percent.
While State-owned enterprises lead the way in investment overseas, privately owned enterprises play an increasingly important role.
More than 25 percent of China-backed projects overseas in 2009 had private company funding.
Glossy performance
"The domestic automaker Geely's acquisition of Sweden's Volvo this August is a good illustration of the glittery performance of private Chinese companies investing overseas," Zhang commented.
China has employed flexible methods in investing overseas, including setting up joint ventures, or mergers and acquisitions, rather than just starting new ventures.
"China's direct investment overseas has grown fast because of the improved competitiveness of domestic companies in the international arena and strong government support," explained Cui Jindu, vice-mayor of Tianjin, and a PhD in economics.
Cui pointed to the companies' increased strength because of evolving corporate governance that is in line with international standards, as well as their growing brand recognition in the global market and stronger professional teams with international operations skills.
In addition, he said, various government offices in China have consistently tried to improve services for companies that go global. This includes streamlining approval procedures, providing tax incentives and foreign exchange policies, and finding favorable bilateral trade and investment agreements with foreign counterparts.
Mario Amano, the deputy secretary-general of the Organization for Economic Cooperation and Development (OECD), believes that China's proactive fiscal and monetary policies and other methods to stimulate growth are the major reasons it could see a revival in the midst of a global economic downturn.
"International investment by China and other emerging economies contributes to the undoing of global imbalances, while opening new development opportunities and creating jobs.
"Many companies in OECD countries with good products and expertise face shrinking markets at home and do not have the scale to expand overseas on their own. For them a partnership with emerging investors can be of great value," Amano said.
The two-day Beijing Fair relates to China overseas investment and is intended to promote stable development and global cooperation. Its hosts are the China Industrial Overseas Development and Planning Association and China Development Bank.
Huang Mengfu, vice-chairman of the Chinese People's Political Consultative Conference's National Committee, and representatives of the NDRC, the Ministry of Commerce, China Development Bank, and a number of international organizations and investment agencies, attended the event.
