F REIGN TRADE - 中国国际贸易促进委员会

ECONOMYSurvey on Chinese Enterprises’ OutboundInvestment and Operation (I)By Market Research Division, Economic Information Department, CCPITThe year of 2011 marked thebeginning of China’s 12thFive-Year Plan period, andalso the 20th year of thecountry’s implementation of its “goingglobal” strategy. In the past decade,Chinese enterprises’ outbound investmenthas witnessed the gradual transitionfrom rapid growth to steady growthand from quantity based growth toqualitative based improvement. In 2011,against the backdrop of increasing turmoilin the global political and economicenvironment, the ongoing deepeningof the European debt crisis, and anincreasing complex international investmentclimate, Chinese enterprises’ outboundinvestment maintained a stablegrowth momentum. Domestic investorsmade non-financial outbound directinvestment in 3391 overseas enterprisesin 132 countries and regions around theworld, and the cumulative direct investmentamounted to US$60.07 billion, up1.8% Y/Y. Going into 2012, domesticenterprises are actively more involvedin overseas investment. In January andFebruary, domestic investors madeUS$7.435 billion of non-financial outbounddirect investment in 706 overseasin 97 countries and regions around theworld, up 59.9% y/y.Since the initiation of reforms andopening-up, especially after China’saccession to the WTO, for both “attractinginwards” and “going global”,Chinese enterprises have become closelyrelated with economic globalization interms of operations and development.The Chinese market has been playingan increasingly important role in thereorganization of global industrial andproduction networks. Under the pressuresarising from the post-financial crisis,rapid domestic market development,and industrial transformation and upgrading,Chinese enterprises are enduringnew challenges, and becoming morewilling to consider new opportunities toenhance their prospects for survival anddevelopment. According to the questionnairesurvey on Chinese enterprises’outbound investment situation and intentioncarried out by the China Councilfor the Promotion of InternationalTrade (CCPIT) which was carried outconsecutively from 2007 to 2012, inorder to “go global”, Chinese enterprisesin the initial start-up stage strive for thebest investment modes, business philosophy,communication channels, andability to adapt in various investmentdestinations around the world. Quit afew of them have established favorablecooperation and win-win situation withforeign companies, and also made somecontribution to local economic development.In combination with the survey ofthe cases involving participation fromthe member enterprises of local subcouncilsof CCPIT, it is forecasted thatover the next few years, Chinese enterpriseswill see great changes in outboundinvestment targets, strategy, environment,risk and management. Therethe 2011 CCPIT Questionnaire Surveyof Chinese Enterprises’ Outbound Investmentshifted its previous focus fromexpert-oriented enterprises to the actualoperating conditions of those involvedin “going global”.The going-global trendand domestic developmentenvironment1. Improving the scope for developmentis the major reason behind enterprises’going global trendThe respondents evaluated the “degreeof restriction of domestic marketenvironment and policy environment onenterprises development”. Among thefactors for market environment, the topthree restricting factors are surging domesticcosts, the high degree of marketcompetition and difficult access to talent.Most of the enterprises going globalconsider they are greatly restricted ineight out of the 11 indicators underthe survey when it comes to domesticexpansion. This somewhat reflects thesuggestion that restrictions on domesticdevelopment and need for expandingthe scope for future development constitutethe major reasons behind whyChinese enterprises are going abroad.See Figure 2.1It is noteworthy that rising costtops the list of factors restricting domesticexpansion of enterprises. Apart fromthat, difficult access to talents, capital,technologies and raw materials are alsoamong the major factors hamperingtheir domestic development. In addition,Figure 2.2 shows the differencesbetween private enterprises and stateownedenterprises in the evaluation oftheir development prospects at home.A comparison indicated that privateenterprises find the domestic access tofinancing and raw materials much moredifficult than state-owned enterprises.See Figure 2.22. Drivers for the going global move byprivate enterprisesTo better understand the domesticbusiness environment of the surveyedenterprises going global, an investigationinto the performance indicatorsrelated to the domestic business ofsurveyed enterprises over the past threeyears was made. Figure 2.3 shows that57.5% of the respondents are satisfiedwith domestic sales, 49.3% satisfiedwith domestic market shares and 47%satisfied with profitability of domesticsales. In terms of growth rates, 53.3%24