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Economy

Globalization of Chinese enterprises stepping into a deeper level

May 04, 2018


Abstract : Chinese enterprises have played an increasingly important role in the process of globalization despite that a series of events have escalated the rising tide of anti-globalization around the world.

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BEIJING, May 4 (Xinhua) -- Chinese enterprises have played an increasingly important role in the process of globalization despite that a series of events have escalated the rising tide of anti-globalization around the world.

The Report on Chinese Enterprises’ Globalization (2017) compiled by the Center for China and Globalization (CCG) which was released on the 2018 Annual Simmit of China Green Companies showed that on the sluggish performance of global economy and a decline in Foreign Direct Investment (FDI), FDI of Chinese enterprises in 2016 reached 183 billion U.S. dollars, an increase of 44 percent year on year, ranking the second largest outbound investor in the world and entering the ranks of net capital exporting countries for two consecutive years.

“China has become an important engine driving the global economy. From exporting products and capitals at the beginning, Chinese enterprises are integrating global resources and transmitting their management power. What they export in this process is the operation and management capability,” Tang Yue, chairman and CEO of X Financial, a leading fintech company focusing on providing personal financial services based on mobile Internet and big data in China, pointed out.

In recent years, CITIC Capital has continuously strengthened its network of overseas investments. At the beginning of 2017, a number of Chinese enterprises, including CITIC Capital, jointly acquired McDonald’s Chinese business and renamed it to the “Golden Arch”. Zhang Yichen, chairman and CEO of CITIC Capital Holdings, believed that the movement somewhat reflected the strong consumption capacity of the Chinese market.

In terms of strategic decision-making, Chinese capital has boosted the growth of McDonald in China over the past year through vigorously developing its delivery service and launching Internet-based marketing to tap the potential of customers.

In the past few years, New Hope Group has continued to expand its overseas presence. Liu Yonghao, chairman of the company said that starting from the Southeast Asian market, the company’s feed sales have now tapped into more than 40 countries and regions around the world, and have 100,000 employees at abroad.

After realizing that the demand of Chinese ordinary people for meat, eggs and milk has been satisfied, and the demand for high-grade beef and mutton is increasing, New Hope extends its business to New Zealand, Australia and the United States to help local farmers meet the needs of the Chinese market.

Since the pet-related consumption market is huge in China, New Hope has spent 5 billion yuan jointly with a number of enterprises acquiring a well-known pet food producer in Australia. In this way. the Australian pet consumption market shared the dividends of China’s consumption upgrading.

When talking about the globalization experience, Liu said, “We have combined resource advantages, the Chinese market demand with the demand of global market to form a new pattern.” The new pattern could easily get support from local governments because Chinese enterprises and the enterprises in the invested countries enjoy mutual benefits while driving local development and promoting local employment.

Guo Guangchang, chairman of Fosun Group, agreed by saying that globalization was an inevitable choice for a country when developing to a certain stage. Thanks to the integration into globalization from 2008, Fosun Group has reported an annual profit growth above 25 percent in the recent five years, and it achieved net profit of 13.2 billion yuan in 2017, Guo added.

Chinese entrepreneurs attending the Summit also stated that at present, the overall international environment was not conducive to the deepening of globalization, and capital flows were subject to particularly evident restrictions. “In spite of some market setbacks or even recession in the recent period, the overall process is irreversible,” said Zhang.

Liu and other entrepreneurs suggested that Chinese enterprises should be more rational in their future overseas investment. Specifically, they should advance the commercialization, marketization, and professionalization of technology, obey the international rules, and enable enterprises and talents to become global at the same time.

“Globalization must be based on the establishment of a mutually-beneficial relationship. We integrate resources around the world, in a bid to provide better services for our customers.” Guo suggested Chinese enterprises to take the responsibility for globalization and achieve better development through sharing and cooperation. (Edited by Ma Xin, maxin11@xinhua.org)

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Keyword: Chinese-enterprises globalization

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