Business / View

Chinese companies 'going global' unstoppable

(Xinhua) Updated: 2012-09-20 09:52

BEIJING -- Chinese tycoon Huang Nubo, whose plan to build a resort in an isolated part of Iceland was turned down amid suspicion a year ago has been given the green light to rent the land by Reykjavik, with the year-long drama coming to a happy ending.

It is the latest sign of Chinese companies going out of the country. After more than three decades of explosive economic growth, investing abroad, not only in developing countries but also developed ones, has become an unstoppable trend for Chinese companies.

The deal was reached with difficulty for Huang Nubo, chairman of the Beijing Zhongkun Investment Group, after an international row over the real intention of the original bid to buy land for the resort - whether it was political because Huang worked for a Communist Party of China department and the Ministry of Construction in the 1980s.

Huang said the Icelandic side proposed signing contracts in China next month and his company will hold a press conference on the deal in Iceland, because the Icelandic people also "want to know what happened."

Huang said his company plans to build resorts in north European countries including Norway, Finland and Sweden over the next five years.

Statistics from the Ministry of Commerce show that as of the end of 2011, Chinese enterprises had set up 18,000 businesses in 178 countries and regions across the world, covering almost all industries.

From 2002 to 2011, China's outward direct investment flow expanded by 27.6 times; in the first seven months of this year alone, the volume of outward direct investment reached $42.2 billion.

However, to knock open the door to overseas markets, Chinese business pioneers need to forge ahead in spite of undeserved suspicion and holdback that reflects a kind of sentiment against China.

In the row over Huang's plan last year, some analysts in the West argued that the project, the first big one from a Chinese firm in Iceland, could provide a cover for China's geopolitical interests around the Arctic.

Similar accusations have haunted more than one Chinese company investing in other countries. Huawei, a private IT firm based in south China, has repeatedly faced such charges as it tried to win contracts or set up ventures overseas.

Given China's vast foreign reserves, outward capital flow is an inevitable option in the global free capital market.

But since developed countries are used to investing in China, their sentiment needs to change regarding investment from China. Undoubtedly, there will be more investment from the world's second largest economy in an era of globalization.

When an investment risked rejection simply because the company's boss worked for the Chinese government decades ago, it can only suggest some people in the West still bear the Cold War mentality.

These people need to better understand the business climate in China, where years of economic take-off have nurtured fertile soil for private businesses and the giant hand of a largely free market dictates most business decisions.

On the other hand, Chinese companies also need to know more about foreign cultures in making their business proposals or running their factories or offices in other countries.

When misunderstandings are dispelled, two-way flow of capital will become easier and even common. It will be good news for an ailing global economy.

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