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External Environment and Strategic Direction of the "Go Global" Strategy for Chinese Enterprises

Remarks by Vice Foreign Minister Song Tao
At the 10th China Import and Export Enterprise Annual Conference

11 January 2012

Distinguished Guests,
Ladies and Gentlemen,

It gives me great pleasure to attend the 10th China Import and Export Enterprise Annual Conference. As the year of the Dragon approaches and the global financial and debt crisis continues, people of the world are setting their eyes on China in the hope that continued economic growth of China will help the world economy recover at a faster pace. We should make full use of the important opportunities brought by the historic changes in the relationship between China and the rest of the world, and speed up the implementation of the Go Global strategy to meet the goal of stablizing growth, adjusting the structure, ensuring people's wellbeing and promoting stability.

Since last year, turbulence, reform and adjustment have featured prominently in the international landscape.

First, international balance of power is going through most profound changes since the end of the Cold War. The underlying impact of the international financial crisis persists. The United States, Europe, Japan and other Western countries face difficulties in their economic development. In comparison, emerging countries, particularly the BRICS countries, have shown a strong momentum of growth, bringing international balance of power closer to equilibrium.

Second, regional turbulence has worsened and the reform of international system has accelerated. The magnitude and fast spread of the turbulence in West Asia and North Africa and its impact on the relevant countries and region were rarely seen in the past decades. Various parties have scaled up their input in the Asia-Pacific region. Relations between countries in the region are going through profound adjustments. Reform of the international system, financial security, climate change and cyberspace have become the new focus of attention. The G20 has become a premier forum for global economic governance.

Third, China's international status and influence have grown significantly. China is now the second largest economy with notable increase in its foreign exchange reserves. All other countries attach great importance to relations with China in the hope of riding on the fast train of the Chinese economy. Yet, China also faces considerable difficulties in its development. The lack of balance, coordination and sustainability in development remains an outstanding problem. It will take long and arduous efforts for China to meet its own development goals.

To implement the Go Global strategy is a major strategic task set by the Central Committee of the Communist Party of China (CPC) in the interest of the comprehensive and long-term development of the country. It is also an important part of China's commitment to the path of peaceful development and its pursuit of mutual benefit and common development. Serving this strategy is highly relevant to our endeavor to seize and make good use of the current period of strategic opportunities. It bears on China's development and its international profile. The Foreign Ministry places great importance on this strategy and is working hard to implement it.

We vigorously promote the growth of bilateral relations to create a sound political atmosphere for economic cooperation with foreign countries. We closely follow developments in international politics and the world economy, offer timely suggestions and guidance for Chinese enterprises. We put people first, give high priority to consular protection to protect the safety and legitimate rights and interests of Chinese citizens and enterprises abroad.

Chinese embassies and consulates in foreign countries have employed every means to facilitate the efforts of our enterprises to go global and address their difficulties.When the situation in Libya worsened last year, under the leadership of the CPC Central Committee and the State Council and in collaboration with other ministries, the Foreign Ministry evacuated more than 30,000 Chinese citizens within a short period of time, which has been widely acclaimed.

Chinese enterprises going global have also supported our diplomatic work with concrete actions. They have helped boost the economy, expand the space of China's development and address the shortage of energy and resources. In the principle of equality, mutual benefit and common development, they have actively promoted local development and the growth of bilateral friendship. Many of them have fulfilled their social responsibilities and gained a good reputation by helping local communities to build hospitals, schools, roads and bridges. Many entrepreneurs have worked as civil ambassadors, playing a role that career diplomats sometimes can hardly play.

Going forward, Chinese enterprises will face more opportunities than challenges in their efforts to go global. Their opportunities come from several aspects. The growing need for investment of the United States and other Western countries will make it easier for Chinese enterprises to conduct trans-national merger and acquisition and explore new channels for cooperation. Developing countries have started to "look east" to attract more investment from China. Moreover, the conditions are now ripe for Chinese enterprises to go global with improved domestic laws and regulations and stronger support from the government. Enterprises have acquired more experience in making overseas investment. A going-global contingent led by well-known companies has been formed.

On the other hand, Chinese enterprises face new challenges as they go global. The world economic recovery is slow. Risks in international finance, exchange rates and markets have increased. In some countries, protectionism is on the rise, leading to more restrictions and barriers against Chinese enterprises. The unrest in some regions has made it difficult to ensure the safety of Chinese investment. The weakness of the legal system in some countries have increased our business cost. Meanwhile, the business practices of some Chinese enterprises need to be brought up to the international standard.

In the face of new opportunities and challenges, we hope that our enterprises will keep in mind the overall and long-term interests, stay committed to the goal of going global in a pioneering spirit and pay greater attention to the following aspects:

First, seize the opportunities. The changes in international situation, particularly the growing national strength and international influence of China, offer rare opportunities for our enterprises to go global. It is a major test for them to seize the opportunities and produce more benefit from going global.

Second, keep in mind the larger picture. As foreign policy has a great bearing on the going global of enterprises, I hope that our enterprises will have better knowledge of the government policies in order to have a better planning of their international business and promote self-development.

Third, have a good image. An enterprise that is going global represents not only itself, but also China. I hope that you will strike a balance in the relationship between the Chinese side and foreign partners, between the enterprise and the country, and between profits and social responsibilities, and that you will bring to foreign countries not only capital, products and technology, but also a popular image of China.

Fourth, run your businesses based on sound decision making. Our enterprises should be mindful of risks and strengthen feasibility studies. They should respect local laws and customs, draw on useful experience of companies from other countries and engage in cooperation through joint investment, joint stock and various other means. They should follow the principle of mutual benefit and aim at long-term development.

Ladies and Gentlemen,

Under the new circumstances, developing countries remain the main destinations for our enterprises to go global. We should consolidate the achievements made so far and advance cooperation in fields where we are competitive by making use of the opportunities brought by the rapid economic growth in African and Latin American countries and industrial upgrading in China.

Neighboring countries are important for China's development. While we grow our economy, we should also promote growth in the surrounding region and pursue common development. We should explore our strengths in geographical proximity and extensive contacts with neighboring countries to build free trade areas, implement investment facilitation measures, enhance infrastructure, energy and financial cooperation and increase infrastructural connectivity with these countries.

Developed countries are a new frontier for our going global efforts. Due to the impact of sovereign debt crisis, Europe needs more foreign capital. On the basis of ensuring safety and returns, our enterprises should actively conduct mutually beneficial cooperation with Europe.

Going global is necessitated by China's peaceful development. It is an endeavor that serves the country and the people. The Foreign Ministry will continue to serve this endeavor with a heightened sense of responsibility and an innovative mind. We will continue to create an enabling international environment to support the implementation of the Go Global strategy.

I wish this conference a complete success.

Thank you!

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