Open global trade remains the way ahead

China has called for an open global business environment and reiterated its commitment to further encourage outbound investment from capable domestic companies in accordance with international market principles and practices, a senior commerce official said on Tuesday.

Qian Keming, vice-minister of commerce, said the rise of protectionism in some countries has not only caused tightened security reviews of foreign investment, but also had an impact on Chinese businesses operating overseas.

“We hope those countries can uphold an open and inclusive attitude, to create an open, transparent and convenient business environment for global investors, including Chinese companies, and inject new strength into the world economy,” he said at a news conference in Beijing.

The 2018 Report on Development of China’s Outward Investment, released by the Beijing-based Chinese Academy of International Trade and Economic Cooperation late last month, already warned Chinese companies to make better preparations to avoid investment risks in North America, since the United States and Canada adopted stricter investment restrictions last year.

Despite confronting certain global challenges, China’s outbound direct investment climbed 4.2 percent year-on-year to $129.83 billion in 2018, while nonfinancial ODI rose 0.3 percent year-on-year to $120.5 billion.

“We found encouraging ODI growth momentum in different shapes including industrial investment, equity replacement, joint venture and franchising in the past year,” he said. “Investment in manufacturing and other real economy fields had remained fast and irrational ODI activities had been effectively curbed.”

Qian said China’s ODI to economies related to the Belt and Road Initiative will witness fast-paced growth, while their cooperation will be increasingly diversified. Member countries of the Association of Southeast Asian Nations have great investment potential in infrastructure projects, power generation, engineering contracting and manufacturing.

The ministry will make continued efforts to innovate the way of outbound investment, and provide companies with more timely, targeted and authoritative public service products this year, said Han Yong, deputy director-general of the ministry’s department of outward investment and economic cooperation.

He said the move aims to help Chinese companies better participate in international competition.

In addition to investing in more global locations, Honson To, chairman of KPMG in the Asia-Pacific region and China, said advanced manufacturing, growing consumption power, urbanization and digital economy, contributed especially by the private sector, will help China put its economic growth on a firmer footing this year.

Many opportunities also came from the recent trade and economic talks between China and the US in both Beijing and Washington, which showed signs of moving in the right direction, and government measures to help small and medium-sized businesses to unclog the lending channels and remove their funding pressures, according to the executive.

As China has growing demand for infrastructure such as more high-speed rail, roads and regional transportation, To said it is equally important to increase the supply of “new infrastructure”, such as 5G networks, cloud computing, the internet of things and AI infrastructure.

Senior official calls on nations to ‘inject new strength into the world economy’