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More effort needed to "go global"

By Wu Handi (People's Daily)

16:34, September 08, 2011

Edited and Translated by People's Daily Online

Currently, China's overseas direct investment has surpassed that of Japan and the United Kingdom and now ranks fifth in the world. It is a delightful achievement brought by the reform and opening-up that has lasted more than 30 years and can also reflect that China is playing a more important role in the transition of the global economic structure.

However, this ranking still does not match China's status as second largest economic aggregate and the holder of the largest foreign exchange reserves in the world. China's overseas direct investment and efforts by Chinese enterprises to "go global" are still in their preliminary stages and still need great policy supports as well as bold explorations on behalf of enterprises.

First, the scale of China's overseas direct investment is still small. Although China's total overseas direct investment exceeded 300 billion U.S. dollar in 2010 after 10 years of rapid development, it accounted for only 6.5 percent of the U.S. overseas direct investment of 2010. China's total overseas direct investment accumulated in the past 10 years was less than the U.S. overseas direct investment in a year. This clearly shows a gap.

Second, China's income from its overseas direct investment is quite low. China's enterprises have paid many "tuition fees" while they were carrying out overseas mergers and have been facing various trade protections and discrimination against their investments. China is still in the preliminary stage of exporting capital and freeing capital from limitations.

One big thing that we should do in the future is maintain and appreciate the value of the income we have. Meanwhile, China should also satisfy the increasing domestic demand for resources and keep strengthening its technological accumulation and innovation to upgrade China's industrial structure and promote the competitiveness of China’s enterprises.

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