| Minister Warns of Overseas Investment Risks |
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| 2006-12-12 16:10 China Daily |
Chinese Minister of Commerce Bo Xilai yesterday urged Chinese enterprises to take precautions against economic, political and personal risks as they step up their investments in overseas markets.
Noting that global conditions have grown more complicated in recent years, Bo said: "I expect them (Chinese enterprises) to avoid disorderly competition while studying the global marketplace to sharpen their competitive edge," he said.
"In addition, they should pay attention to personal security problems," he said, referring to cases where Chinese people living and working overseas have been robbed or murdered.
The minister said the Chinese Government will spare no effort to help Chinese enterprises invest safely abroad by facilitating agreements and working with local governments.
"On the policy level, we should create a stable environment for Chinese investors to ensure their security and to support them in terms of taxation, financing and insurance," Bo said.
He added that China's embassies in investment destination countries must provide information and ensure the personal safety of Chinese investors' staff.
After years of growth, many Chinese enterprises have accumulated resources and expertise for overseas expansion in such areas as construction, telecommunications, tourism and commerce.
This year, 19 Chinese enterprises made the top 500 for global multinationals, and 49 civil engineering firms made it to the list of the world's top 250 constructors.
Significant strides have been made in China in the past 20 years in the areas of technology, human resources and equipment. Many Chinese enterprises are qualified to win more engineering projects abroad, he said.
"I believe that in around 5 to 10 years we will see some symbolic landmarks built by Chinese contractors," Bo said.
Up to now, China's overseas investment has remained small: China's total outbound investment only accounts for 1.57 percent of overall global foreign direct investment.
"We still have a long way to go," Bo said. "It will be a long process of experience accumulation, talent cultivation and management improvement."
The Chinese Government has adopted various measures in recent years to encourage firms to diversify into overseas markets. Such measures have included providing assistance to Chinese enterprises to build economic zones overseas.
Outbound investment is seen as an effective way to reduce the country's growing trade surplus, which has raised concern among China's major trade partners.
According to figures from the General Administration of Customs, China's trade surplus hit US$22.9 billion last month, the second-largest ever for the country, boosting total surplus for the first 11 months to US$156.5 billion.
(Source: China Daily)
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