Chinese Enterprises "Go Out" Into A High Risk Period

Entering the 2012, along with the upsurge of Chinese enterprises' "going out", the risks faced by investment are also accumulating.

Recently, the Ministry of Commerce issued a risk warning for overseas investment of Chinese enterprises.

Investment is bound to be associated with risks, but experts say that in 2012, considering the rapid growth of overseas investment in Chinese enterprises, the risk is even more significant in the world with huge political and economic variables.

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China's overseas investment risk warning has entered a high risk stage.

Entering the 2012, Chinese enterprises' overseas investment activities are becoming more and more active.

According to the latest data of the Ministry of Commerce, in January 2012, domestic investors made direct investment in 355 overseas enterprises in 87 countries and regions in the world, and realized non financial foreign direct investment of US $4 billion 376 million, an increase of 59.9% over the same period last year.

Along with the upsurge of Chinese enterprises' "going out", the risks faced by overseas investment are also accumulating.

Recently, the Ministry of Commerce issued a risk warning for overseas investment of Chinese enterprises.

The economic reference daily, according to the preliminary statistics of public information, only in January this year, the Department of Commerce in Asia, Europe, West Asia and Africa issued nearly 20 warning messages.

"At the same time, we must be soberly aware that the implementation of the" going global "strategy has entered a new stage, which is faced with both rare opportunities for development and safety, risks and so on.

Since the beginning of this year, the international political and economic situation has become increasingly complex and changeable. The situation in West Asia and North Africa has been turbulent. The European debt crisis has been continuously fermented, and the social security environment is worrying.

At the beginning of the year, I was hijacked and kidnapped by overseas construction workers.

In January 28th, 29 Chinese workers were hijacked in Sultan. On the 31 day, 25 Chinese workers were hijacked by Egypt.

Such a high frequency of sudden attacks has aroused widespread concern over the safety of overseas structures and personnel.

In an interview with reporters, Deputy Secretary General of China industry overseas development and Planning Association said that the most prominent risk of Chinese enterprises' "going out" in the near future is political instability.

In addition, there are signs of increasing barriers from overseas.

One industry insider told our reporter that by the impact of the European debt crisis, more and more Chinese enterprises turned their investment to Europe, especially the acquisition of brand and technology.

Such mergers and acquisitions are always more difficult and more hindrance.

There are overseas media views that China's rapid growth of overseas investment will encounter obvious and powerful obstacles, because (Overseas) although there is an urgent need for Chinese funds, but faced with a surge of Chinese funds, there is also unease.

And call it right.

It is reported that in January this year, France set up 11 committees to monitor core industries, including automobile, aerospace, naval and railway pportation, luxury goods, consumer industries, technology, medical and renewable energy industries.

And Italy will follow the French strategy to discuss undesirable foreign mergers and acquisitions in industries deemed to be of strategic importance, such as energy, telecommunications, technology, defense and food.

Investment is bound to be accompanied by risks. Under the complicated political and economic environment, the pressure of Chinese enterprises' overseas investment will be further increased.

Experts said that in view of the rapid growth of Chinese enterprises' overseas investment, the increase in risk in the world with great political and economic variables in 2012 should be more vigilant.

The "going out" of Chinese enterprises is entering a period of high risk.

Li Zhongmin, an associate researcher of the International Investment Research Institute of the Institute of world economics and politics of the Academy of Social Sciences, told reporters that "going out" would have risks, which is inevitable.

For example, the risk of exchange rate risk, foreign exchange control and other policy risks caused by the instability of currency value, and the conflict of censorship of legislative assembly are often encountered.

In terms of performance, recent risks have indeed increased, especially in Africa, Latin America and other regions.

The reason for this is that there is a lot of risk. This is also because our overseas assets are large and not so large before.

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Risk prevention capability needs to be improved

Experts say that in addition to the objective reasons for the external environment, the risk of Chinese enterprises going out also comes from their own reasons.

It is mainly the lack of international risk prevention ability of enterprises, which is embodied in the following aspects: the insufficiency of international operation ability and the shortage of internationalized talents, and the management level of enterprises is often unfamiliar with the legal environment and business environment of foreign countries.

Shao Ning, deputy director of the State Council's SASAC recently told the media that there are a few central enterprises in the process of "going out", and pointed out that the reason for the loss is that the overseas business risk prevention system is not perfect, the overseas asset management and control system is imperfect, and there is a shortage of talents and experience in international operation.

Taking overseas mergers and acquisitions as an example, Chen Congwei, an analyst at Qing Ke research center, has been paying close attention to the field of overseas M & A for a long time. She told the economic reference daily that the number and paction volume of overseas M & A pactions in China have maintained a remarkable growth. However, it is worth noting that the failure rate of overseas mergers and acquisitions of Chinese enterprises has also been the highest in the world.

In addition to the external environment, there are also reasons for the enterprises themselves.

"For example, the acquisition of Sucrogen by Guangming Food in China has not been successful, because the lack of a professional team led to failure to make a correct assessment and negotiation of Sucrogen and premature disclosure.

Chen Congwei put forward several suggestions for reference to the successful cases: first, domestic enterprises need to have certain foundation and strength, understand and master the operation of the industry, and then have an in-depth understanding of overseas enterprises, and make clear the purpose of the acquisition.

Second, domestic enterprises need to think clearly about all the problems and solutions before undertaking overseas mergers and acquisitions.

In addition, after successful trading, enterprises need to know how to build excellent management teams.

Finally, we should be good at learning.

Li Zhongmin suggested that enterprises should first be based on the domestic market and improve their competitiveness in the domestic market.

If you really need to invest abroad, you should have a clear goal, a small step, a lot of research.

"Many large enterprises are not enough in research.

Before investing overseas, we should study clearly the local policies, the economic situation, the investment environment, the law and the labour sector, especially in the labour sector. We often have problems, such as the demand for employment, the government's policies and the restrictions on the repatriation of profits. "

"Although there are various risks in 2012, it does not mean that risks will hinder Chinese enterprises from investing abroad."

He Zhenwei said, on the one hand, Chinese enterprises have realized this kind of risk. After the emergence of the Libya issue, enterprises realized the problem of political risk, thus enhancing the sense of circumvention.

Moreover, Chinese enterprises are getting more and more experience in going out, and learned from their lessons that they should not stop investing abroad because of risks.

Looking at the general direction, it is a favorable opportunity for Chinese enterprises to go out.

Just because of problems, there are many business opportunities.

When enterprises encounter problems of survival, they must solve some problems that could not be solved before, and there are many opportunities.

Therefore, Chinese enterprises should fully seize this opportunity.

He suggested that enterprises can make good plans before investing, and choose countries with low risks as far as possible. Once again, enterprises can do well in insurance before going out, and problems can be compensated through insurance channels.

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Joint construction of risk prevention and control system

The risk of frequent occurrence has undoubtedly put more demands on the government departments.

Shen Danyang, a spokesman for the Ministry of Commerce, said that in the past few years, the Ministry of Commerce has embarked on building a "going global" risk prevention and control system in guiding enterprises to prevent safety risks.

According to introducing, this system has four main contents: first, strengthen the basic work.

The Ministry of Commerce has developed a statistical system for foreign investment cooperation, covering more than 90% of the information of foreign enterprises, projects and personnel.

Once there are problems outside, we can quickly grasp the information and provide effective protection for properly handling overseas security incidents.

The two is to set up an early warning system.

The Ministry of Commerce and relevant departments will strengthen the monitoring, analysis and judgement of the safety situation in hot spots, and issue early warning in time.

Three is to strengthen regulatory measures.

We will conduct safety audits for enterprises and projects in high-risk countries.

The four is to provide government public services.

It will regularly issue guidelines for foreign investment cooperation, guide to country regions, and country trade and investment environment report, provide guidance for enterprises to prevent overseas risks, organize overseas personnel to conduct overseas safety training, sign bilateral investment protection agreements, and help enterprises solve overseas risks.

"Recently, the Ministry of Commerce issued the" guidelines for the safety management of overseas Chinese funded enterprises and personnel ", which is an important task in building a risk prevention and control system for" going out ". The main purpose is to guide enterprises to establish scientific overseas security risk management system, strengthen pre event management, and effectively evade and control risks.

Shen Danyang said.

Li Zhongmin commented on this comment.

He Zhenwei said that the government can take measures to effectively help enterprises to prevent risks.

At present, the national development and Reform Commission and the Ministry of commerce are making approval for enterprises going out. In this process, the government should remind enterprises to pay attention to risk factors.

On the one hand, it is approved that these projects conform to the guidance and system requirements of our overseas investments. On the other hand, we should pay attention to reference to country guidance catalogues in order to make our national enterprises go out healthily.

In addition, not only the government, but also various institutions should make efforts to improve the risk awareness of enterprises.