History
The Go Out Policy (also referred to as the Going Global Strategy) was an effort initiated in 1999 by the Chinese government to promote Chinese investments abroad. The Government, together with the China Council for the Promotion of International Trade (CCPIT), has introduced several schemes to assist domestic companies in developing a global strategy to exploit opportunities in the expanding local and international markets.
The programs launched so far by the Chinese Government have these goals in mind:
- increase Chinese Direct Foreign Investment (FDI)
- pursue product diversification
- improve the level and quality of the projects
- expand financial channels with respect to the national market
- promote brand recognition of Chinese companies in EU and US markets
Since the launching of the Going out Strategy, interest in overseas investing by Chinese companies has increased significantly especially among State Owned Enterprises. Statistics indicate that Chinese direct foreign investments rose from US$3 billion in 1991 to US$35 billion in 2003. This trend was underscored in 2007, when Chinese FDI reached US$92 billion. This boost in foreign investment can also be attributed to the Chinese Government's ability and commitment to create the right environment for foreign investment; and China's huge production capacity, coupled with low labor costs. With a dynamic economy, and a strong business-friendly culture, the outlook for Chinese companies will continue to be positive.
As part of its efforts to restructure state-owned enterprises, the Chinese government has established the SASAC (State-Owned Asset Supervision Administration Commission), which develops China's equity exchange market, while supporting Chinese foreign investments. SASAC's responsibilities include:
- supervision and evaluation of state-owned enterprises
- oversight of state-owned assets
- recruiting of top executive talent
- drafting of laws, administrative rules and regulations that promote increased development of corporate law in China
- coordination of local state-owned assets as prescribed by law
The SASAC operates through several equity exchanges such as CBEX (China Beijing Equity Exchange), which is the largest and most prestigious in terms of trading volume. It is headquartered in the heart of Beijing financial district. Presently, CBEX has established three international platforms in Italy, Japan and the United States of America. The Italian CMEX (China Milan Equity Exchange), created in 2007, is CBEX's first international partner, operating as a liaison to facilitate the penetration of Chinese companies into the Italian and European markets and of European companies in China. Following the trend of the Go out policy, some of the most prominent Chinese professional institutions are expanding their business on the international markets. King&Wood, the largest Law Firm in China with more than 800 lawyers, has recently opened a branch in Japan and in the US, while Grandall Legal Group (one of the most prominent Chinese Law Firms, with a staff of more than 600 professionals) through its International Department has established a European hub called the “China-Europe Legal Group” to assist Chinese companies in Europe. Carone & Partners is a member law firm of the “China-Europe Legal Group” in Italy.
Read more about this topic: Go Out Policy
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