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 | Friday, April 21, 2000, updated at 14:47(GMT+8) | ||||||||||||
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Chinese Enterprises Explore Overseas MarketA number of Chinese enterprises now have begun multinational operations, according to Financial News.Household electrical appliance manufacturers, who were among the earliest to import foreign technology, have also become the first to enter international investment projects. China's household electrical appliance production capacity has expanded dramatically since 1990, but the domestic market for these products has long been stagnant. To explore new markets, many of these companies have set up factories in overseas. Shenzhen Konka Electronic Group Co. Ltd., for one, has taken the first step toward establishing a color television assembly factory in India. The new factory will have an annual capacity of 300,000 TV sets with components made in China. The Changhong Electronics Group Corporation has collaborated with Russian counterparts to establish a television assembly factory in the outskirts of Moscow which will produce three million TV sets a year for the Russian and Eastern European markets. The Qingdao Haier Refrigerator Co., Ltd. invested 30 million US dollars in a South Carolina, U.S.A. refrigerator factory with a current production capacity of some 200,000 refrigerators a year. When the whole project is in full operation, output is expected to reach 500,000 units. Haier has also established refrigerator and washing machine factory in Indonesia. In 1993, the Qingdao Beer Company Limited became the first Chinese mainland enterprise to be listed on an overseas exchange, the Hongkong Stock Exchange. By the end of 1998, 43 enterprises from the Chinese mainland had taken in a total of US$ 10 billion through listing on overseas stock markets. The outstanding performance of these enterprises has attracted more and more foreign stock exchanges to invite Chinese enterprises to become listed. After a Shanghai seminar in 1998 about listing Chinese enterprises on the Singapore Stock Exchange, eight Chinese enterprises were listed on the exchange. These overseas financial activities have greatly improved the companies' capital structures and have connected them with the international market. Since the Asian financial crisis, the Chinese government has utilized overseas processing trade and investment as effective methods for increasing the exports of raw and processed materials, components and parts, and machinery equipment. Last year, the General Office of the State Council announced that those overseas Chinese enterprises which use materials made in China will enjoy favorable policies in export rebates, foreign exchange management, and financial services. The Chinese government has already given approval to 50 competitive domestic enterprises to invest in overseas markets. These businesses account for a combined investment of US$ 40 million in the areas of household electrical appliances, light industry, pharmaceuticals, electro-mechanical products, and clothing. Their major target markets include Asian countries, the Commonwealth of Independent States (CIS), and Eastern Europe.
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