It is obvious that some Chinese companies have had the competitiveness of the world’s top brands. However, the uncertainty of China-U.S. relations is undermining the market’s confidence to move forward. Since Donald Trump assumed office as the President of the United States, trade frictions between China and the U.S. have cast a shadow over the global economy. The United Nations Conference on Trade and Development (UNCTAD) recently released its World Investment Report 2020, which predicts that the COVID-19 pandemic will cause global foreign direct investment to decrease below US $1 trillion for the first time since 2005. Countries, especially in Europe and America, are cautious about conducting foreign investment, and the number of restrictive foreign investment policies hit a new high in recent years. Given this backdrop, questions have arisen: What is the future for China’s outbound trade and investment? Should China continue to support economic globalization? Should Chinese enterprises maintain their “go global” strategies and if so, how can they succeed?
In early 2020, the Center for China and Globalization (CCG) released the book The Globalization of Chinese Enterprises: Trends and Characteristics, written by CCG president Dr. Wang Huiyao and secretary-general Dr. Miao Lü. The book, published by Springer Publishing Company, draws on nearly 3,000 data samples, using both quantitative and qualitative research methods. It investigates challenges confronted by Chinese enterprises when doing business in foreign countries, presents unique insights into the feature and patterns of Chinese enterprises’ globalization, and serves as a useful reference for enterprises that have gone global and those that plan to do so.
The book is divided into three chapters. Chapter One studies the current trend and features of foreign investment worldwide. It shows that 2017 saw the fastest growth rate for both the global economy and global trade since 2011, with a growth rate of three percent and 4.7 percent respectively. By contrast, outbound investment decreased worldwide in 2016 and 2017. In addition, levels of investment in developed nations shifted drastically, while investment in developing ones has remained stable and robust. Generally speaking, international investment policies are becoming more liberalized, but protectionist measures adopted by certain countries remain a cause for concern.
Chapter Two analyses the current trends and features of China’s outward foreign direct investment (OFDI). Despite rising trade barriers and the trend of anti-globalization, China’s economy continues to grow. Although Chinese enterprises’ OFDI slowed, investment fields and patterns stabilized. At the same time, investments diversified and broadened in scope, with particular success cases along routes of the Belt and Road.
Chapter Three focuses on problems faced by Chinese enterprises operating globally and proposed solutions. As the “go global” movement accelerates, Chinese enterprises have encountered various problems in the process, such as insufficient ability to manage risks, low participation in the formulation of international standards, barriers to the internationalization strategy of corporate brands, and the limited internationalization ability of corporate personnel. To help address these issues, this chapter maps out the current situation and challenges in each area, conducts causal analysis, and proposes relevant solutions accordingly. Additionally, the book shares statistics on outbound investment by 879 Chinese enterprises between 2016 and 2017.
Though faced with certain uncertainties, the trend of Chinese enterprises “going global” is irreversible, and will continue to grow. As a consensus pointed out in the book, during these uncertain times for economic globalization, China has become a supporter, creator, and leader of a new round of globalization. In global governance, China advocates an open, inclusive, and balanced approach, pursuing justice and win-win results. In international trade, China supports the multilateral trade system, and continues to open up its market. China has also implemented a series of opening-up policies that lower the bar for market entry and creates a more attractive market with better protection of intellectual property rights.
The Belt & Road Initiative (BRI) is providing a new impetus to the recovery of the global economy. Until now, China has signed 200 documents for jointly building the Belt and Road with 168 countries and international organizations. From 2013 to 2019, the cumulative total of China’s trade in goods with countries along the BRI routes exceeded US $7.8 trillion; its direct investment in countries along the routes exceeded US $110 billion; and the value of newly contracted projects was close to US $800 billion.
Former secretary-general of the Boao Forum for Asia Long Yongtu wrote in the foreword to the book that the “go global” strategy has been central to the globalization of Chinese enterprises. Over the last 40-odd years of China’s reform and opening-up, Chinese enterprises have transformed into an important force and proponent of economic globalization. Chinese outbound enterprises have the potential to lead a new round of globalization and further contribute to the construction of a community with a shared future for mankind.
In an open letter released on August 3, Zhang Yiming, founder of ByteDance, stated, “Bytedance has never changed from being a trustworthy global company. In an era undergoing tremendous changes, striving to this end is even more worthwhile.” Zhang’s words resonate with other Chinese companies.