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People's Daily Online>>China Business

Chinese firms seek overseas expansion in crisis, lending hands to global recovery (3)


09:27, December 29, 2011

China's overseas investment is likely to grow 20 to 30 percent annually in the next two to three years, an Ernst & Young report said.

Over the past decade, Chinese investment has proved nonthreatening to many countries, but instead, it can help them pull through crises; yet Chinese investors still face unfair treatment, Lin said.

Many proposed Chinese deals in the overseas market have been blocked by national security or technology issues, Lin said. The Chinese telecom giant Huawei has repeatedly been rebuffed from making deals in the United States over security concerns during the past few years.

In the latest outcry, China's Zhejiang Youngman Lotus Automobile and Pang Da Automobile Trade Co. were rejected in a deal to purchase Swedish automaker Saab, as Saab's former parent company GM refused the technology license transfers. The refusal finally led to Saab's bankruptcy.

To create a fair environment for Chinese investment, Lin called for developed economies to "remove political factors in reviewing Chinese deal proposals in order."

Besides external factors, Chinese investors should also recognize their own weaknesses to cope with these setbacks, said Wang Zhile, director of Beijing New-Century Academy on Transnational Corporations.

Wang said Chinese firms are increasingly challenged by compliance management, which requires familiarity with local laws and rules and corporate regulations in obtained businesses. Communications with non-governmental organizations and focusing on local public appeals are also important.

"We cannot count on the outbreak of financial crisis to lift China's 'going global' drive, but Chinese firms can take the chance to improve their competitiveness," Lin said.

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