In 2015, centering on reform deepening, system innovation, service optimization, environment creation and interests protection, the Ministry of Commerce actively promoted the construction of the “Belt and Road,” steadily carried out international capacity cooperation, effectively implemented the important special projects like the Action Plan of China-Africa Industrialization Partner, the integration of building and operation and the innovation projects of outward economic and trade cooperation zones. MOFCOM also constantly optimized the policies and measures, making China’s outward investment and cooperation maintain a favorable development trend. The outward direct investment maintained a rapid growth of double digit rate, and the goal of a 10% growth in the whole year was more than fulfilled. The construction of outward economic and trade cooperation zones, the infrastructure construction and contract foreign projects presented many highlights, and the number of large scale projects increased obviously, which effectively promoted the transformation and upgrading of China’s economy and the reciprocal and win-win foreign cooperation. The official of the Department of Outward Investment and Economic Cooperation of the Ministry of Commerce pointed out China’s outward investment and cooperation in 2015 mainly had five features:
China’s Outward investment hit the new record high with a hard-earned growth for 13 consecutive years. In 2015, China’s nonfinancial outward direct investment reached US$ 118.02 billion, hitting a new record high, up 14.7% year on year, realizing a growth of 13 consecutive years with an annual growth rate of 33.6%. During the 12th Five Year Plan, China’s outward direct investment was 2.3 times that of the 11th Five Year. At the end of 2015, the stock of China’s outward direct investment surpassed US$ 1 trillion for the first time.
Foreign contract projects stepped into a new stage, and franchising projects witnessed prominent highlights. In 2015, the newly signed contract volume of China’s foreign contract projects exceeded US$ 200 billion, reaching US$ 210.07 billion, up 9.5% year on year. In development phases of the foreign contract projects, the annual contract volume took about 30 years to reach US$ 100 billion (reaching US$ 104.56 billion in 2008), but it only took just 7 years to reach US$200 billion. With the increasing in scale of the business constantly and the pattern innovation becoming more vital, the Ministry of Commerce encouraged enterprises to undertake franchising engineering projects (including BOT, BOO and PPP) in recent years,. According to primary statistics, in 2015, 30 franchising projects were newly signed by Chinese enterprises or under construction (operation), covering US$ 10 billion.
The investment and Cooperation with the countries along the “Belt and Road” went smoothly, and the international capacity cooperation led a rapid growth of business. In 2015, Chinese enterprises conducted direct investment in 49 countries related to “Belt and Road”, with the investment totalling US$ 14.82 billion, up 18.2% year on year. Chinese enterprises undertook 3,987 foreign contract projects in 60 countries related to “Belt and Road”, and the newly signed contract volume reached US$ 92.46 billion, accounting for 44% of the total newly signed contracts of foreign contract projects in the same period. In the same period, Chinese enterprises invested US$ 11.66 billion directly to competitive industries like transportation, electric power and communication, up 80.2% year on year. The outward direct investment of the equipment manufacturing industry was US$ 7.04 billion, up 154.2% year on year. Up to the end of December, 75 cooperation zones were being promoted by Chinese enterprises, half of which were the processing and manufacturing zones closely related to capacity cooperation. The enterprises invested a total amount of US$ 7.05 billion and 1,209 enterprises entered the zones. The total value of output of the cooperation zones were US$ 42.09 billion with the tax of US$ 1.42 billion paid to the host countries, driving part of the capacity of traditional competitive industries like textile, clothing, light industry and household appliances to transfer to the abroad.
The Investment through M&A covered a wide range and that of local enterprises accounted for about 80% of the total M & A volume. According to the initial statistics, in 2015, the Chinese enterprises conducted 593 overseas merger and acquisition, with the transaction volume reaching US$ 40.1 billion (including overseas financing), covering almost all industries of the national economy. China National Tire & Rubber Corporation purchased about 60% of the shares of Pirelli with 4.6 billion Euro, which was the largest overseas M&A projects of Chinese enterprises in 2015. In terms of the M&A volume, local enterprises accounted for 75.6% of the total.
Investment countries (regions) were relatively concentrated, and the investment in the U.S. enjoyed a rapid growth. In 2015, China’s outward direct investment was mainly in Hong Kong, Cayman Islands, the United States, Singapore, British Virgin Islands, Netherland and Australia. The investment in the top 10 countries and regions reached US$ 101.63 billion, accounting for 86.1% of the total outward nonfinancial direct investment. Investment in the U.S. reached US$ 8.39 billion, realizing a rapid growth of 60.1%.
The official of the Department of Outward Investment and Economic Cooperation of the Ministry of Commerce emphasized the rapid development of China’s outward investment and cooperation in 2015 were mainly attributed to the following two factors:
In one aspect, the domestic and international situations were beneficial to the outward investment and cooperation, and the momentum of the enterprises to go out was strengthened. In 2015, the international economic pattern continued the profound changes, and the countries made efforts to realize the economic recovery. The International reorganization and optimal allocation of resources accelerated. Countries were more willing to carry out economic and trade cooperation with China, and they attached great importance to the investment and cooperation with China. In addition, the Chinese enterprises strengthened transformation and upgrading, and speeded up the “going out”. Outward investment and cooperation stepped into a period of important strategic opportunities.
The leading role of the “Belt and Road” was prominent. China’s initiation of the “Belt and Road ”gained recognition and response from more and more countries. Their willingness to strengthen investment and cooperation with China were constantly enhanced. In 2015, the direct investment and foreign contract projects of Chinese enterprises with the countries alongside “Belt and Road” witnessed a rapid growth.
International capacity cooperation was promoted. With the promotion of China’s industrialization, the acceleration of industrialization of the developing countries and the re-industrialization of the developed countries, Chinese economy integrated more closely to the economies of other countries. More and more Chinese capital, technologies and equipments entered into the international market. China’s industrial strength was further shown. In 2015, China’s international capacity cooperation enjoyed a strong growth.
The enterprises were active in transformation and upgrading. China’s tasks of accelerating economic structure adjustment and transforming development modes were more and more arduous. Affected by the cost raise of domestic production factors, the enterprises’ will to go out was stronger. The enterprises speeded up their international operation, and were active in transformation and upgrading through various outward investment and cooperation. Outward investment has transformed from establishing trading companies overseas to actively integrating with the international innovation network, and it is now establishing research and development center overseas or carrying out investment to high-tech and advanced manufacturing industry through merger and acquisition. Foreign contract project has broadened from civil construction to high value added fields like overall project-contracting, project financing, designing consultation and operation maintenance. All of these have become the new engine of driving the development of outward investment and cooperation.
On the other hand, the overlapping effects of policies came out, and the business environment was constantly optimized. The Ministry of Commerce promoted outward investment facilitation, and implemented the filing-based management. MOFCOM actively built platforms for outward investment and cooperation, and signed agreements with related countries. MOFCOM practically promoted major projects, and was active in constructions with related countries on industrial partnership, outward economic and trade cooperation zones, infrastructure and connectivity. MOFCOM enhanced investment and financing supports, and implemented the policy supports like preferential credit, project financing and export insurance. MOFCOM also optimized the public service platform of “going out”, in order to provide comprehensive services to the enterprises. Besides, MOFCOM strengthened the overseas risks prevention and safeguarded China’s interests overseas.
The Ministry of Commerce promoted the international capacity cooperation. Together with the National Development and Reform Commission, MOFCOM drafted and issued the Guiding Opinions on Promoting the International Capacity and Equipment manufacturing Cooperation and submitted it to the State Council. MOFCOM put emphasis on the capacity cooperation in the field of electric power, rail transit and park construction, as well as the cooperation with key countries and regions. MOFCOM also promoted the Northeast and Hebei province to carry out equipment manufacturing and international capacity cooperation.
MOFCOM deepened the management system reform, and implemented the decision of the central government on deepening economic system reform. MOFCOM also constantly promoted the reform on outward investment management system and issued the Notice on Implementing Non-paper Management of Outward Investment Filing and Simplifying the Cancellation Procedures of Outward Investment. This further facilitates the enterprises to handle outward investment filing and cancellation procedures. Besides, MOFCOM issued the Temporary Provisions of the Approving Opinions for the Counselor's Offices to Deal with the Bidding (Bid Negotiation) of Foreign Contract Projects. This to optimizes the database of foreign contract projects. MOFCOM also issued the Examination Method of Outward Economic and Trade Cooperation Zones to strengthen the supports to the construction of the cooperation zones. MOFCOM guided 11 provinces including Anhui and Sichuan to deliver the approval authority of the operation qualifications of foreign labor cooperation to the commercial departments at prefecture-level. The printing of The Certificate of Quality of External Labor Training was delivered to the responsible provincial commercial departments. Besides, MOFCOM also issued some normative documents like the Notice on Furthering the Related Work of Good Management on Foreign Labor Cooperation, the Notice on Standardizing the Management of Dispatched Personnel of Foreign Contract Projects, and the Service Guide Model of Outward Economic and Trade Cooperation Zones.
MOFCOM strengthened the public service of the government. MOFCOM enhanced the guidance to the enterprises on the environment of foreign countries for conducting outward investment and cooperation, issued the Country (Region) Guidance for Outward Investment and Cooperation (2015), the Statistical Bulletin on China’s Outward Direct Investment in 2014 and the Facilitation Report on Outward Investment and Management 2015, and compiled the Typical Cases of Going Out and the Outward Investment and Management Obstacles Report 2014. All of the above public services have become the authoritative information channel for Chinese enterprises to know about the investment and cooperation environment of other countries. MOFCOM also issued the Statistical Bulletin on China’s Foreign Direct Investment in 2014, optimized the information service system of outward investment and built the public service platform for “going out”. MOFCOM drove the chambers of commerce and associations to establish cooperation relations with the cooperation zones, to help the cooperation zones to attract foreign investment and make full use of the resources of the chambers of commerce and associations. MOFCOM made a good job in the policy training of outward investment and cooperation and built the investment promotion platforms to strengthen publicity and public opinions guidance.
MOFCOM promoted the practical bilateral cooperation. We formulated the medium and long term development plans for outward investment and cooperation to promote the in-depth development of the economic and trade relations between China and the related countries. We actively participated in the formulating of the international rules, and speeded up the FTZ arrangements. We drove the outward direct investment in the key fields like agriculture and forestry. We carried out the transnational and transnational infrastructure cooperation with Africa, promoted the enterprises to conduct a batch of major overseas projects related to high-speed rail, railway and nuclear power. We also steadily promoted the connectivity projects with surrounding countries. We strengthened the inter-governmental cooperation, promoted the construction of the outward economic and trade cooperation zones, and drove the clustered “going out”.
MOFCOM strengthened the overseas risks prevention. We strengthened the risk assessment of the countries and the safety precaution, and issued the information of safety precaution. In 2015, MOFCOM released 33 overseas safety risks precautions. We also strengthened the safety management of the Chinese enterprises overseas, and conducted the major inspection of safety production of outward investment and cooperation. MOFCOM participated in 10 major overseas emergent and security events including evacuating the Chinese citizens in Yemen and the terrorist attack in Mali. Together with the related departments, MOFCOM properly handled more than 10 major labor disputes in foreign countries like Angola.