Chinese investment overseas

Chinese investment overseas

Foreign direct investment in China (ODI) has grown rapidly in recent years. The maximum total amount of U.S. $ 48000000000 ODI in 2009, which means that China is the sixth of the world in terms of ODI in 2009, China has invested in approximately 180 countries around the world. The government of China could reach $ 100 billion in 2013 and ODI ODI stocks, including $ 500,000,000,000. While the rapid increase of China's ODI to be consistent with the growth of a significant level of investment in the global economy is still a unique phenomenon in comparison with international experience, all the common target in a foreign country like China, the United States , Great Britain, Japan, Germany and France as a modern nation: a rich variety of income levels in the technology capital, and advanced management. In contrast, China still ranked 100 of the world based on GDP per capita, according to IMF data. Economists are famous in Japan Kiyoshi Kojima, once the dominant models of American and Japanese ODI by Kojima, the main purpose of the American ODI is to provide access to international markets, while the main goal of Japan is the cost of ODI production. less expensive abroad. But both shared one thing in common: investors, as the obvious advantages in technology and management. ODI is a different aspect of China. It is divided into three main areas: (1) the service sector: a lot of investment to facilitate the export (2) the resources that China has a long-term goal of ensuring a stable supply of resources; E ( 3) The modern production: China to get the advantage of technological and management skills through the acquisition. Clearly, this investment is aimed at shifting production to foreign countries - aims to strengthen our in-house. And most investors do not benefit from any technology or management. It may be too early to conclude that the ODI from China, China is clear. Some of the features that we observe may be transitional. However, in preliminary observations, we can say more or less. First, without a large investment in technology compared to local Chinese entrepreneurs are ambitious. Secondly, Chinese ODI is characterized by a large number of funds that is evidenced by the $ 2.5 trillion. Reserves of foreign exchange. Three Chinese investors run the risk of increased investment in most cases, Chinese companies will be sailing in unknown waters. Chinese companies have been in contact with the international market for years. But for the most part, this was through trade. Knowledge on the social, political and economic of the country was extremely limited, and Chinese companies now have to pay the cost of this disadvantage. One of the Chinese state-owned enterprise (SOE) I know that the plan to make major investments in the United States. Since this is a major industry, and this board · must be approved by the government, SOE has hired a lawyer in the commercial is very well known lawyer in Los Angeles, but unfortunately they do not know anything about politics. Washington and lobbying skills are not. The agreement fell apart quickly. More has been a coal mine in Australia and the largest company in the world of advertising, the coal mine. This unfortunately does not help to improve the image of the company due to the Australian public in general are feeling negative, depending on the coal mining companies for environmental damage they cause. Statistics show that the tax haven, such as the Virgin Islands, Chinese ODI focuses on underdeveloped countries with the legal system and corruption issues seriously This may be because the market has been forced into a higher barrier for investment in China. But it is possible that many Chinese investors to deal with them as a way of dealing with the corruption of some of these practices is seen to do with the ministers and even presidents. This is very dangerous. Perception that Chinese ODI is associated with the transmission of any damage that may occur with the expansion of the organization as a threat to the future of China. The most contentious issue between China and the West as a way to deal with the dictator. As a way to intervene in the West, while China insists on non-interference. For investors, who come from a completely state-owned enterprises will be difficult to avoid the host country government and the Chinese ODI in a positive impact on local economies and people of each country can benefit. But the military dictatorship will fall. Too close to the dictator could be turned into a heavy bag for the future. By John Garnaut, Chinese ODI is in trouble spread. 'Chinese investors are not familiar with the layout of the regulation of labor markets and technologies. The insecurity in the country, especially in Africa, which will adapt to the transitional regime. In North America and Pacific islands, the tradition of fighting for the rights of local communities in which they are to provide comfort at the state level does not solve the problem at the grassroots level. '. Currently, the federal government in state-owned enterprises account for 63 percent of China's total ODI, but if we look at the experience at the beginning of Chinese economic reform, mostly from ODI and medium-sized enterprises in Hong Kong, Taiwan and Korea. These small and medium-sized enterprises in sectors where workers are the ones that I need to migrate. They also enjoy a clear advantage in technology management and marketing for SMEs because it is lagging behind in terms of ODI? Currently, three government departments and ODI: State Administration of Foreign Exchange (SAFE) has approved the exchange of the Ministry of Commerce (MOFCOM) license, and the National Development Commission (NDRC) to evaluate the benefits. This means that national duplication, and this means that SMEs can not afford to jump through bureaucratic hoops. The solution is - as the work of all three institutions. For example, instead of licensing can be wasted Mocom and consulting services to large international network of consoles. NDRC and can provide more space for the private sector to go abroad. As a side note that enterprises face higher barriers to entry in a foreign country and are at higher risk of investment decisions, because they have an incentive to distort Chinese ODI is likely to continue to grow rapidly. But to make good investment decisions, the government must be put in place a policy framework as well. It also requires each organization to make the house more to understand the political and economic context of the host country. Otherwise, most of the investment may be lost and the reputation of Chinese companies could be damaged. Yiping Huang is Professor of Economics at the China Center for Economic Research at Peking University and the ANU Crawford School of Economics and Government