China's big overseas investment time is ripe

China Daily Online news: China Daily's June 22 commentary headline: China's overseas direct investment in 2008 has become a solo show for global FDI. The acceleration of China's overseas investment is based on the global industrial layout, as well as the trade-off of the reliance on dollar bonds by adjusting asset structure, reducing currency risk. It is an inevitable choice for China's future reform and opening-up to seek from the export of goods to capital export, from the capital agglomeration strategy to the investment strategy, from the trade big country to the capital power, to realize the transformation from the positive trade advantage to the higher level capital competitive advantage.　　As the overseas media commented, the era of "Made in China" is coming to an end, and the era of "all China" is about to begin. Global OFDI flows fell by more than 20% per cent in 2008, but China's OFDI has risen sharply, not less. China's foreign direct investment in 2008 amounted to $53.4 billion trillion, up nearly 1 time times from 2007. The non-financial category of direct investment was 40.65 billion dollars, up 64% from 2007. China's OFDI in 2009 may also be the first to exceed the actual amount of foreign investment.　　Overseas investment will be the starting point of China's economic restructuring and entering a new stage of development.　　First, China is already in the stage of economic development of large-scale overseas investment. According to Dunning's Investment development Path (IDP) theory, a country's net outward direct investment (FDI), i.e. the difference between foreign direct investment (FDI) and foreign direct investment (NOI), is a function of the economic development stage of a country. At a certain stage (2000-4750 dollars per person), the transformation of the investment phase becomes an inevitable choice. The key to promote the conversion is to increase the yield of foreign investment and promote the formation of domestic capital competitive advantage.　　The Swiss bank's data show that 2007 per capita GNP in China (measured in real purchasing power) has reached 4610 U.S. dollars, is in the Dunning refers to the large-scale output phase of capital.　　Second, in terms of long-term structural adjustment, China must step down its trade surplus. On the one hand, China's export-oriented economy has been hit hard by the global economic recession and external demand, and the foreign trade situation has deteriorated continuously. April The total value of China's imports and exports fell 22.8%, the chain fell 1.9 and 2.1% respectively, and the export chain decline has expanded, to 5.5%. From the relationship between global economic growth and trade growth, trade growth volatility is higher than economic growth (the general elasticity coefficient is about 8). Global trade is expected to fall by around 8% this year, with global economic growth of 1%. According to China's share in global trade, 2009 China's foreign trade may appear 15–20% decline. If the global economy is in a 3-5-year adjustment period, global trade is unlikely to recover significantly in the short term. On the other hand, the crisis has made the global economy face a multi-year rebalancing process. As the demand side of the US and Europe countries are also being forced to adjust their development strategy, reduce debt ratio, increase reserve rate, change consumption structure and consumption patternTo reduce the imbalance in the trade deficit, China's exports of high growth over the years has been impossible to continue. In fact, Japan is our precedent. Japan's economy, which has always been "a nation of trade", is facing serious challenges. Recent data show that total Japanese exports plummeted by 16.4% per cent in fiscal year 2008 at the end of March, the biggest drop since the 1980 fiscal year had comparable statistics. Imports have also fallen for 5 consecutive months, with a sharp contraction in imports and exports, resulting in Japan's trade deficit of 725.3 billion yen (about 7.38 billion US dollars) in the fiscal year 2008 to 2009 (2007 yen for the foreign trade surplus in fiscal year), For the first time since fiscal year 1980, the annual trade deficit has emerged. In particular, exports in the first quarter of this year fell by 26% in the chain, the biggest decline since the war. Exports of the auto industry, which has always been seen as the two major foreign trade engines, have also fallen by 24.2% and 19.7%, respectively, and the sharp deterioration in exports of Japan, which has plunged 1.4%, has led to a stunning 15.2% decline in the Japanese economy in the first quarter, a sign of the "country of trade" that has　　The strategy has reached the limit of development, China must take warning.　　Third, the relevant policies continue to improve the Chinese capital to "go out." This year, China's policy of encouraging foreign investment has been frequent. With two months ago, the Ministry of Commerce promulgated the "Overseas Investment Management measures" to encourage enterprises to cross-border investment or mergers and acquisitions; the State administration of foreign exchange has recently promulgated the Regulations on foreign currency administration of domestic institutions (draft for soliciting opinions), and intends to adjust the foreign exchange management of domestic enterprises to the registration system Next, the Ministry of Commerce will, on the basis of the regulations on the administration of foreign contracted projects in 2008, draw up the two regulations of the Regulations on the administration of foreign labor cooperation and the foreign investment cooperation regulations, and in order to safeguard the overseas lawful rights and interests of Chinese enterprises, China has established bilateral economic and Trade Commission mechanism with more than 100 countries and regions in the world, and signed 127 bilateral investment protection agreements.　　The successive promulgation of these policies and regulations will provide a comprehensive policy guarantee for China's overseas investment.　　Four, the external environment of this elimination of the long for our country to make room for development. Especially since February this year, the procurement mission to Europe, the European Investment Group, Chinese enterprises to Australia to buy a wave higher than a wave.　　Many countries see the high growth of China's economy as the best way to help their country out of the crisis, so they have an olive branch to attract potential investors in China, which has made room for China's overseas investment in the context of the difficulties in financing and the decline in profits of the developed countries ' multinational companies, shrinking and even withdrawing　　Still, China has a long way to go to become an overseas investment powerhouse. Although China has 12000 official statistics in more than 180 countries in 2008, it has become the world's sixth largest foreign investment country. China's OFDI accounted for only 5% of global external assets in 2007, equivalent to 1/4 in Japan, 1/10 in Germany and 1/20 in the United States.The ratio of FDI to foreign investment in China in 2007 was 4.42:1, and 2008 rose to 1.77:1, but there was a big gap compared with developed countries.　　China's overseas investment has great potential for development. In addition, the Chinese capital "to go out" also needs the renminbi internationalization process to follow up simultaneously. With high energy money and high energy capital, the global strategic arrangement of Chinese capital "going out" will greatly increase the capital demand of RMB abroad, and also the opportunity for RMB to gain more share of international financial market, from which the internationalization strategy of RMB is in the same vein as China's capital strategy. The recent implementation of RMB Cross-border settlement and currency swap agreements has greatly promoted the regionalization process of RMB, but it is far from internationalization. The international currency must have at least three basic functions, namely, clearing function, wealth function and investment function. The settlement function is only the necessary condition of currency internationalization, not the sufficient condition. To become a settlement currency, the renminbi still needs to solve many problems such as settlement channels, return of RMB, investment and exchange.　　It also needs the formation of the related pricing mechanism of RMB interest rate and exchange rate marketization, and the internationalization of RMB is the basic constraint of China's large-scale overseas investment. In addition, how to promote the overseas direct investment facilitation, optimize the overseas investment structure, raise the capital return rate of the overseas direct investment and accelerate the construction of Shanghai International Financial Center, and promote the return of overseas investment profit, whether Chinese enterprises do well the risk forecast and management, etc. are the related guarantee that must be solidly done. (Author is Zhang Monan editor Yiu Ying Zhang Feng), deputy researcher of World Economic Research Department, Ministry of Economic Prediction, national Information Center