New Features of Chinese Enterprises' Globalization
Since 2014, the Chinese government has strengthened the reform of the foreign investment management system, accelerated the completion of the transition from the approval system to the record-keeping system, improved the facilitation of Chinese companies’ foreign investment, and greatly promoted the pace of Chinese companies’ “going out”, especially In the context of the “Belt and Road” strategic conception, from policy communication to facility connectivity, to the smooth flow of goods, financing and people-to-people bonds, the “five links” field will provide Chinese companies with a new mechanism for international regional cooperation and a platform for international cooperation. Enterprises' foreign investment will usher in a new round of upsurge. Private enterprises have become the main force of "going out", investment entities are diversified, investment is concentrated in small and medium-sized enterprises, and location choices are also showing new trends.
Large-scale investment by Chinese companies in the “Belt and Road” region has increased
The investment scale of Chinese companies along the “Belt and Road” is as high as 407 cases with a concentration of US$100 million to US$1 billion, followed by large-scale investments of US$1-10 billion, reaching 121 cases. The areas of investment along the “Belt and Road” are concentrated in mining, transportation, and manufacturing. At the same time, investment in these traditional industries has shown a downward trend, and investment in infrastructure, information transmission and computer services has increased significantly.
It can be seen that the needs of countries and regions along the “Belt and Road” are changing, and they are more selective in absorbing foreign investment, and attaching importance to improving the development of science and technology and informatization in their own countries. With the in-depth advancement of the "One Belt, One Road" strategic concept, companies from all over the world will enjoy the dividends of regional openness.
Private enterprises have become the main force of "going out"
Affected by factors such as rising domestic labor prices and environmental pressures, Chinese private enterprises have been actively expanding overseas markets in recent years, constantly seeking technological breakthroughs, and shaping their international brand image. At the same time, relevant departments have revised the foreign investment approval measures, relaxed restrictions on foreign investment, and increased the enthusiasm of private enterprises for overseas investment. Private enterprises give full play to their own advantages, use their own brands, independent intellectual property rights and independent marketing channels to carry out global procurement, production, and sales, and actively establish an international industrial value chain.
Transnational mergers and acquisitions shift from single holding to diversification
From 2002 to the first half of 2015, the total number of overseas investment cases of Chinese companies was 2018, of which the number of cross-border mergers and acquisitions was 1,817, accounting for 90% of the total number of cases, indicating that cross-border mergers and acquisitions have become the main way for Chinese companies to invest abroad. At the same time, the cross-border mergers and acquisitions activities of Chinese enterprises have shifted from seeking holdings solely to strategic cooperation. In cross-border M&A activities, from 2002 to 2007, the average annual number of M&A cases of Chinese enterprises accounted for less than 30% of the shares, and only 4 cases, and holding investment as high as 11 cases. As more and more companies go global, non-controlling M&A cases have increased year by year, indicating that Chinese companies pay more attention to the business cooperation between the two parties in the transaction and the realization of multiple goals such as technology, management, and branding, which is very good for enhancing corporate competitiveness. Effect.
Small and medium-scale foreign investment has increased significantly
Through the analysis of the investment cases of Chinese companies from 2002 to the first half of 2015, it is found that the investment scale of Chinese companies is concentrated between 100 million and 1 billion U.S. dollars, accounting for about 63% of the total investment, as shown in Table 4. Among them, from 2014 to 2015, the average annual number of investment cases of private enterprises was 256, which was 7 times the average number of investment cases from 2008 to 2013, showing explosive growth. Large-scale investment of more than US$1 billion by state-owned large-scale enterprises has dropped significantly. It can be seen that the active overseas investment activities of small and medium-sized enterprises and emerging enterprises have led to an increase in small-scale investment by Chinese enterprises.
At the same time, the investment industries of US$100 million to US$1 billion are widely distributed, mainly in traditional industries such as mining, manufacturing, transportation and real estate, while smaller-scale investments of less than US$100 million are distributed in the TMT industry. More and more small and medium-sized enterprises attach importance to cultivating their core competitiveness and improving their comprehensive strength. Small-scale investments by Chinese companies are mainly concentrated in a few countries such as the United States, Australia, Japan, and South Korea. The average proportion of investments under US$1 billion is as high as 84%. The top ten countries for Chinese companies to invest abroad are the United States, Australia, the United Kingdom, Japan, Canada, Indonesia, Germany, Russia, Brazil, and South Korea.
The proportion of overseas investment in China's manufacturing industry is growing rapidly, and US investment ranks first
In 2014, Chinese companies invested in overseas manufacturing industry accounted for approximately 33% of the total foreign investment cases, a year-on-year increase of 14%. The number of investment cases was 160, of which 35 were undisclosed investment transactions, and the total amount of disclosed investment transactions was US$32.962 billion. . The U.S. is an important destination for Chinese companies’ overseas investment. China’s investment in U.S. manufacturing accounted for 41% of the total investment, an increase of 24% year-on-year. The main reason for Chinese companies’ large-scale investment in U.S. manufacturing is the rapid increase in manufacturing costs in China. The manufacturing cost is already close to the United States, and the gap has been reduced to less than 5%, which has promoted Chinese companies to build new factories in the United States.
"Cluster going to sea" has become a new way for China to "go global"
With the establishment of China's status as a net investment exporter, scale expansion will give way to quality improvement. The traditional investment model needs to be changed. In the face of more and more complex investment environments, the initial methods such as single-handedness and division of forces seem to be incapable of relying on the company's own capabilities. Therefore, it has become an inevitable choice for companies to go to the sea in clusters. For example, the Las Bonbas copper mine project invested and constructed by China Minmetals Group in cooperation with Guoxin International and CITIC Metal has become the largest mineral project invested and constructed in Peru.
Investment in the TMT industry continues to rise sharply, and the United States remains the first choice
In 2014, there were 58 cross-border mergers and acquisitions in China's TMT industry, with an investment scale of US$23.4 billion, ranking first among all sub-sectors. There are 20 cases of cross-border mergers and acquisitions in the TMT industry in the United States, with an amount of up to 8.64 billion US dollars. The investment is mainly concentrated in the game industry and semiconductors. Among them, Lenovo Group, Alibaba, China Mobile, Giant Investment and Pudong Technology Investment ranked the top 5 in investment amount. At the same time, there are as many as 7 Alibaba mergers and acquisitions, and the performance is the most active. A typical case is the US$248.9 million investment in Singapore Post, and the US$250 million investment in the American carpooling application Lyft.