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New body proposed for ODI promotion

New body proposed for ODI promotion

Updated: 2012-03-14 08:09

By Tan Yingzi (China Daily)

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Agency would help Chinese firms conduct business in foreign lands

China should learn from the successful experience of the United States Chamber of Commerce and set up a special organization to promote overseas investment, a member of the Chinese People's Political Consultative Conference National Committee proposed during the last day of its annual session on Tuesday.

As more and more companies are looking overseas, Duan Qihua, also a lawyer in Shanghai, finds Chinese investors are facing many problems and challenges in other countries.

New body proposed for ODI promotion

Some have failed and suffered huge losses due to a lack of knowledge about international regulations, local politics and laws, Duan said in his proposal.

China's telecommunication giant Huawei experienced severe setbacks in the US after its attempts to acquire local companies were blocked over concerns about national security.

He suggested that China learn from the Japan External Trade Organization and US Chamber of Commerce and set up a global network for Chinese investors.

In addition to promoting trade, those organizations have branches across the world, collecting business information and lobbying local policymakers to bring about favorable regulations for their investors.

Although some Chinese investors have hired foreign lobby firms or consultants to help with problems, "everyone is fighting alone and there is no such organization to unite them and provide professional consulting services", Duan said. "China has lagged behind those countries in this regard."

According to the Ministry of Commerce, the nation has led the developing countries in overseas investment since 2006. Chinese outbound direct investment in the non-financial sector was almost 380 billion yuan ($60 billion) last year.

The Ministry of Commerce has more than 200 offices abroad, and they have undertaken some of the lobbying work, but they cannot keep up with the fast growing demand from Chinese investors.

Duan's proposal suggested that some non-government or semi-government body, such as the All-China Federation of Industry and Commerce, be set up in the major international locations and strengthen support to overseas investors.

Valuable information can be shared among members of such an organization, which not only benefits individual companies but also protects national economic interests, Duan stated in the proposal.

"Ideally, an organization like this would help foster a deeper dialogue between Chinese companies and the countries they invest in," Justin Knapp, director of the China outbound practice at Ogilvy Public Relations Worldwide in Beijing, said.

"This would not only help increase the competitiveness of Chinese business, but help minimize cultural misunderstandings."

He also suggested that the body should have less connection with the government.

Wang Huiyao, director of the Beijing-based Center for China and Globalization, said Chinese companies need to unite and establish an organization to help them with overseas expansion.

"Chinese companies' awareness about protecting their overseas interests and workers is rather poor, and there is a shortage of talent to help them," he said.

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