Transformation Of Chinese Enterprises' Going Global Path

One day in the winter of 2001, Liu came to the reception office of Provence food company, France to promote his own tomato sauce.

Although nobody stayed for a whole day, Liu Yi, who was chairman of Xinjiang Zhongji industrial Limited by Share Ltd, did not regret it, and did not even think that he could become Provence's boss in the future.

In that year, the sales revenue of Provence company reached the best level of 85 million euros.

But from the second year, the company began to go downhill because Italy imported a lot of Chinese tomato paste and had a strong competitive advantage in cost.

At the same time, Xinjiang Zhongji is also hoping to pform from a single raw material base sauce supplier to an enterprise that produces raw material base paste and can produce terminal tomato products. However, as the tomato products industry has just started in China, Xinjiang Zhongji lacks relevant technology.

One side hopes to get a stable and cheap supply of raw materials, and one side hopes to get the technology of tomato products.

In 2005, Xinjiang Zhongji invested 11 million euros and bought 100% stake in Provence food company.

From the output of products and the export of labor to capital export, Xinjiang Zhongji has witnessed the pformation of Chinese enterprises' going out path, and the pformation is due to loosening of policies.

In 2002, the sixteen major reports of the Communist Party of China came up with the words "insisting on bringing in and going out, and comprehensively improving the level of opening to the outside world".

This is a critical turning point.

Since then, the Ministry of Commerce, the national development and Reform Commission, the Ministry of Finance and the foreign exchange administration have gradually started the pace of policy adjustment.

China's two major policy banks, the National Development Bank and the China Import and export bank, have set up financial wings for Chinese enterprises to "go out".

Xinjiang Zhongji used the interest free loan from the China Exim Bank to complete the acquisition.

On the loan list of the National Development Bank, the "going out" credit support is not only included in the resource industries such as PetroChina, Sinopec, China Minmetals and China Metallurgical Group, but also HUAWEI and Tsinghua Tongfang, TCL and other IT and household appliance enterprises.

After experiencing the mode of foreign cooperation focusing on export trade and technology import, foreign investment is becoming the focus of China's new round of foreign cooperation since the sixteen.

As early as the late 1990s, the overseas economic and trade cooperation zone was promoted by private enterprises, but it has not yet been formed.

Zheng Xiukang, chairman of Kangnai group, did not expect his business to win financial support from the Ministry of Commerce in order to circumvent the "anti-dumping" practice of establishing an industrial park in Russia.

By the end of 2005, the Ministry of Commerce put forward an outward investment measure to establish an overseas economic and trade cooperation zone, which was confirmed in early 2006.

At that year's national business conference, 13 key projects in the business field were put forward, one of which was to establish an economic and trade cooperation zone outside the country.

In June 2006, the Ministry of Commerce began to implement plans to establish an overseas economic and trade cooperation zone and encourage enterprises to "go abroad".

At this time, it is precisely when China's foreign trade friction is frequent. Therefore, the construction of the overseas economic and trade cooperation zone has become a key task initiated by the Ministry of Commerce in 2006. The Ministry of Commerce has officially launched the declaration and bid evaluation of the supporting objects. At the same time, it is determined that the government will come forward and select some countries according to the investment environment, market capacity and trade arrangements, and discuss with the host governments, and strive to win preferential policies for the enterprises.

During the Spring Festival of 2006, Kangnai group received the notice of Zhejiang provincial foreign trade and Economic Cooperation Department and Wenzhou foreign trade and Economic Cooperation Bureau: enterprises wishing to invest abroad can participate in the bid of the Ministry of Commerce's "overseas economic and trade cooperation Park".

Kangnai group, which is planning to submit the declaration form, joined the other 60 companies in the bid of the Ministry of Commerce, and Kangnai became one of the 8 companies that won the bid.

The successful bid enterprises will establish financial and economic cooperation zones outside China, and will receive state financial support and subsidize the actual expenditures that meet the requirements in proportion to 30%.

These contents are written in the opinions of the Ministry of Commerce and other 11 ministries and commissions on the promotion of the construction of overseas economic and trade cooperation zones (Draft).

The active promotion of the Ministry of Commerce marks the pformation of the construction of the park from the corporate behavior to the will of the state, and the Chinese manufacturing industry has opened the curtain of industrial pfer worldwide.

Compared with previous enterprises' "single fight" in the establishment of foreign companies, the "collective sea" because of the formation of complete industrial matching, so the cost is relatively low; and the local government will give more support.

At present, China has established an overseas economic and trade cooperation zone in Russia, Zambia, Kampuchea, Pakistan and other countries.

Through the establishment of the park, the Ministry of Commerce hopes that industries with large domestic production capacity and strong competitive advantages, such as textiles, clothing, shoes and caps, bags, household appliances, building materials, metallurgy, plastics, nonferrous metals, petrochemicals, medicine and agricultural and sideline products, will gradually "go out" and enter the overseas economic and trade cooperation zone.

These are mostly industries that are more important than exports, susceptible to trade friction or basically saturated by domestic markets.

After the entry of these enterprises into the foreign economic and trade cooperation zone, the "benefits" obtained can be calculated.

For example, Kangnai's approach is to put half finished shoes into the park and finish the final assembly (with customs clearance calculation, the export duty of a pair of semi finished shoes is 5%, while the tariffs on finished shoes are 15%), so that Russia can be sold to Russia and the EU market with strong purchasing power, so there is no need to worry about "grey customs clearance" and trade barriers.

Tariffs will be reduced by at least 70%, while the average tariffs of other enterprises in the park will be reduced by 50%.

Besides the "real gold and silver", the Ministry of Commerce will also introduce supporting policies to support small and medium-sized enterprises cluster out of the country in the near future.

These policies include finance, finance, insurance, entry and exit, taxation and so on.

In July 27th this year, the Ministry of Commerce held a national conference on overseas economic cooperation and trade cooperation, which has roughly identified twelve contents, including financial subsidies, financial loans and bilateral high-level regular consultations.

Behind this is the support of the government, and Chinese enterprises are more emboldened to go out.

According to the latest statistics, the average annual growth rate of China's outward foreign direct investment in the past 3 years is 7..3%, and foreign investment has entered a stage of rapid growth.

Over the past 5 years, the number of Chinese enterprises investing abroad in mergers and acquisitions has increased significantly.

By the end of 2006, China's total foreign direct investment (non-financial) had reached US $73 billion 330 million, and domestic enterprises had invested more than 160 countries and regions. The global ranking rose rapidly from seventeenth in 2005 to thirteenth last year.