Chinese firms' push into global market

The government is expecting "record" levels of outbound direct investment by Chinese companies this year, and has vowed to ease and improve the systems involved to ensure that momentum continues.

Speaking at the 4th China Overseas Investment Fair in Beijing, Mu Hong, deputy head of the National Development and Reform Commission, pledged to boost the resources available to companies, and set up information networks and associations to help organizations with the advice they need to seek opportunities overseas.

"Despite the sluggish world economy, Chinese outbound investment remained robust and the whole year will see Chinese outbound investment at record levels," said Mu.

He said that in the first 10 months of the year, China's non-financial outbound direct investment totaled $58.17 billion, up 25.8 percent from a year earlier.

The country's ODI increased by 8.5 percent year-on-year in 2011 to $74.7 billion, with non-financial ODI reaching $68.6 billion, up 4 percent year-on-year.

The government will be looking at various specific issues, he said.

For instance, efforts will be made to improve the investment safeguards offered to Chinese companies by neighboring countries, while at home, there will be a fine-tuning of the legal and approval requirements needing to be met by firms looking to invest abroad.

The government also plans to fund a network of public information organizations abroad, and establish investment agencies and associations at home, which could offer business advice to companies looking to invest internationally.

They will be available to guide companies in the often-complex legal and regulatory conditions of key markets around the world, as well as working to promote the image of the country globally.

Commerce Minister Chen Deming said last week that Chinese non-financial ODI is likely to pass $70 billion in 2012 and that the surging momentum will drive ODI close to foreign direct investment in China in the next five or 10 years.

Zhang Yun, president of the Agricultural Bank of China Ltd, added that despite the stuttering recovery in the world economy, he expected China's ODI to keep growing apace, through a combination of external opportunities and internal driving forces.

"The financial crisis of 2008 created investment opportunities. The process of restructuring assets and optimizing resource allocations has quickened in China with overseas countries now welcoming Chinese investment.

"The expansion of the country's economy and the progress of renminbi globalization also serves as international motivation," Zhang said.

In his report to the 18th National Congress of the Communist Party of China, President Hu Jintao called on Chinese enterprises to speed up their global activities by enhancing their international capacities and reputations.

According to Liang Yutang, deputy head of China Minsheng Banking Corp Ltd, the organization has plans for a $10 billion fund to help private enterprises invest overseas over the next three years.

"ODI by private companies accounted for 44 percent of China's total ODI by the end of 2011. Private companies are more dynamic than State-owned ones, and have become an emerging force in the overseas investment market," he said.

In a note presented at the forum, Organization for Economic Cooperation and Development Secretary-General Angel Gurria said Chinese overseas investment benefits both China and the world.

"It provides timely capital needed for the growth of the world's financial sector.

"Chinese outbound investments in past years, most of which flowed to developing countries, greatly eased the financial crisis," he said.

"Its outbound investments help it access more markets, acquire more natural resources, advanced technology and management skills, which will boost the country's economic growth."

lijiabao@chinadaily.com.cn