Jun. 19 – The numbers of Chinese FDI investment continue grow, as the economy continues to slow and excess capacity builds up, many private firms find no choice but to look abroad. Approximately 60 percent of leading Chinese companies plan to move research and development centers and/or production overseas in the next five years.
Moreover, 80 percent of these companies plan to establish or expand sales and marketing and/or service operations overseas. Chinese companies are increasingly providers of investment and employment. That figure roughly doubles the number of Chinese companies that are currently sending these functions abroad, Chinese globalizers hoping to expand R&D, manufacturing operations abroad.
The Chinese government ﬁrst proposed Chinese ﬁrms to “go overseas” (“zouchuqu” literally means “go out” but may be taken to mean “go global”) in 2001 in its 10th Five-Year plan. In the sixth national congress of the China Communist Party (CCP) proclaimed the go overseas policy, which covers FDI, the undertaking of foreign construction and engineering projects, and the export of Chinese employment or labor services. It is known that in the initial stage of the policy’s introduction, policy measures were mainly in the form of relaxation of restrictions on investment overseas, including the vetting and approval of such investment, plus some minor ﬁnancial support.
Today’s Chinese globalizes clearly have the ambition and intent to expand not only geographically, but also on establishing technologies, manufacturing and R&D capabilities outside China. Most Chinese FDI company’s focus now is brand image and technology. There are more Chinese companies are planning to expand their business in Europe or Latin America, with the Middle East and North Africa, sub-Saharan Africa and Northeast Asia also claiming significant attention.
China has become the world’s third-largest investor for outward foreign direct investment last year, there are various Chinese companies expect more overseas contracts, and investment going overseas turning to widening world of opportunities, but the total accumulated value of FDI is still small, To succeed in foreign investment, Chinese firms need to integrate themselves with the locals, work closely with the government, financial institutions and their counterparts in local markets where they invest. For the report on “Chinese Direct Investment in the EU-27- Geographic Distribution” available upon request, contact with DCCC, or mail to: firstname.lastname@example.org