Go Out policy
Go Out policy(Chinese:Đi ra ngoài chiến lược;pinyin:Zǒuchūqù Zhànlüè) or theGoing Global Strategy(zho chu qu),[1]: 6 is thePeople's Republic of China's current strategy to encourage its enterprises toinvest overseas.The policy was announced as a national strategy by Jiang Zemin in March 2000.
History[edit]
Jiang Zeminfirst began encouraging domestic enterprises to "go global" and enter foreign markets in 1996, a time when the domestic market was showing signs of stagnation.[2]: 76 In Jiang's view, Going Out into foreign markets was necessary to advance China's development.[3]: 56 In February 1998 at the Second Plenary Session of theFifteenth Central Committee,Jiang stated that as part of the policy on responding to theAsian Financial Crisis,leaders should encourage exports and support powerfulstate-owned enterprisesin setting up factories overseas.[4]: 402 Jiang formally announced it as a national strategy in March 2000.[3]: 56 The policy was implemented top-down from central government leadership.[5]: 123 The policy it was incorporated into the report of the16th National Congress of the Chinese Communist Party.[2]: 77 During Jiang's tenure, the policy greatly expanded China's investment and influence inglobal Southcountries, especially those in Africa and Asia.[5]: 124
Pursuant to the Go Out policy, by the end of 2001, China was participating in more than 195 overseas resource projects, invested more than US$8.4 billion to establish more than 6,610 overseas enterprises, and signed a total of US$26.8 billion for foreign labor services.[4]: 402–403 In the early 2000s, Chinese enterprises were generally unable to compete with enterprises from the more industrially developed countries and frequently accepted projects in which those enterprises were not interested.[1]: 17
State-owned enterprises have been some of the most high-profile entities investing overseas as part of the Go Out policy.[6]: 6 Significant SOEs involved in Going Out includeChina National Petroleum Company.[4]: 403
China's sovereign fundshave supported efforts to Go Out, including by helping Chinese enterprises finance mergers and acquisitions abroad.[3]: 11 In 2015 for example,China Investment Corporationturned one of its divisions into the wholly-owned subsidiary CIC Capital. This move was intended to support theBelt and Road Initiativeincluding by conducting foreign direct investment and by supporting state-owned enterprises of China engaged in mergers and acquisitions in economic sectors prioritized by the state.[3]: 114
In 2015, theMinistry of Agricultureissued the Strategic Plan for Agricultural Going Out, providing state subsidies to enterprises that invested in various overseas locations.[7]: 251
As of at least 2024, and unlike the early days of the Go Out policy, many Chinese enterprises are internationally competitive and able to competitively in the more developed markets.[1]: 17
Examples[edit]
Emerging marketshave been an important part of China's going out strategy.[8]: 225 For example, in Africa Chinese direct investment rose from $1 billion in 2004 to $24.5 billion by 2013.[2]: 77 Within Africa, Ethiopia is a particularly emphasized place where Chinese companies should "go out" to, with Chinese top leadership describing Ethiopia as a "bridge" between the Belt and Road Initiative and Africa's development, as well as "a pilot country for China-Africa production capacity cooperation."[9]: 222–223
Overseas SEZs[edit]
From 1990 to 2018, Chinese enterprises established eleven SEZs in sub-Saharan Africa and the Middle East including: Nigeria (two), Zambia, Djibouti, Kenya, Mauritius, Mauritania, Egypt, Oman, and Algeria.[10]: 177 Generally, the Chinese government takes a hands-off approach, leaving it to Chinese enterprises to work to establish such zones (although it does provide support in the form of grants, loans, and subsidies, including support via theChina Africa Development Fund).[10]: 177 These zones fall within the Chinese policy to go out and compete globally.[10]: 182
The first Chinese overseas SEZs facilitated the offshoring of labor-intensive and less competitive industries, for example in textiles.[10]: 177 As Dawn C. Murphy summarizes, these zones now "aim to transfer China's development successes to other countries, increase business opportunities for China manufacturing companies, avoid trade barriers by setting up zones in countries with preferential trade access to important markets, and create a positive business environment for Chinese small and medium-sized enterprises investing in these regions."[10]: 177
Agricultural enterprises in Africa[edit]
Since the mid-1990s, China has encouraged its agricultural enterprises to seek economic opportunities abroad as part of its go out policy, including to Africa.[10]: 188 Chinese policy guidance has specifically encouraged such efforts in rubber, oil palm, cotton, vegetable cultivation, animal husbandry, aquaculture, and assembly of agriculture machines.[10]: 188 The encouragement for agricultural enterprises to go out has also resulted in the creation of Agricultural Technology Demonstration Centers in African countries.[10]: 184 The function of these centers is to transmit agricultural expertise and technology from China to developing countries in Africa while also creating market opportunities for Chinese companies in the agricultural sector.[10]: 184 China is motivated to establish these centers out of both an ideological commitment to fosteringSouth-South cooperationand sharing its experience with less developed countries and by a pragmatic desire to increase its long-term food security.[10]: 182–188
China first announced its Agricultural Technology Demonstrations Centers at the 2006 meeting of theForum on China-Africa Cooperation.It launched 19 of these centers between 2006 and 2018, all in sub-Saharan Africa.[10]: 184 As of 2023, ATDCs have been established in 24 African countries.[11]: 173
Southeast Asia[edit]
Southeast Asia has been a major recipient of Chinese investment prompted by the Go Out policy.[6]: 80 Chinese foreign direct investment in southeast Asia is primarily in sectors like mining, energy,industrial parks,and infrastructure.[6]: 80 As of 2024, Chinese investment in agriculture in southeast Asia is comparatively small but growing.[6]: 80
Energy[edit]
Because the more accessible oil resources had already been claimed, when China National Petroleum Company and other enterprises went out, they tended to enter less politically stable countries with greater political and security risks.[2]: 77
See also[edit]
References[edit]
- ^abcChen, Muyang (2024).The Latecomer's Rise: Policy Banks and the Globalization of China's Development Finance.Ithaca and London:Cornell University Press.ISBN9781501775857.
- ^abcdMeng, Wenting (2024).Developmental Peace: Theorizing China's Approach to International Peacebuilding.Ibidem.Columbia University Press.ISBN9783838219073.
- ^abcdLiu, Zongyuan Zoe (2023).Sovereign Funds: How the Communist Party of China Finances its Global Ambitions.The Belknap Press ofHarvard University Press.doi:10.2307/jj.2915805.ISBN9780674271913.JSTORjj.2915805.S2CID259402050.
- ^abcWu, Guoyou; Ding, Xuemei (2020). Zheng, Qian (ed.).An Ideological History of the Communist Party of China.Translated by Sun, Li; Bryant, Shelly. Montreal, Quebec: Royal Collins Publishing Group.ISBN978-1-4878-0392-6.
- ^abGarlick, Jeremy (2024).Advantage China: Agent of Change in an Era of Global Disruption.Bloomsbury Academic.ISBN978-1-350-25231-8.
- ^abcdHan, Enze (2024).The Ripple Effect: China's Complex Presence in Southeast Asia.New York, NY:Oxford University Press.doi:10.1093/oso/9780197696583.001.0001.ISBN978-0-19-769659-0.
- ^Harrell, Stevan (2023).An Ecological History of Modern China.Seattle:University of Washington Press.ISBN9780295751719.JSTORjj.8362580.
- ^Eisenman, Joshua; Heginbotham, Eric (2023). "China's Relations with the Global South". In Kironska, Kristina; Turscanyi, Richard Q. (eds.).Contemporary China: a New Superpower?.Routledge.doi:10.4324/9781003350064-25.ISBN978-1-03-239508-1.
- ^Yan, Hairong;Sautman, Barry(2024)."China, Ethiopia and the Significance of the Belt and Road Initiative".The China Quarterly.257(257): 222–247.doi:10.1017/S0305741023000966.
- ^abcdefghijkMurphy, Dawn C. (2022).China's Rise in the Global South: the Middle East, Africa, and Beijing's Alternative World Order.Stanford, California:Stanford University Press.doi:10.11126/stanford/9781503630093.001.0001.ISBN978-1-5036-3060-4.JSTORjj.8305946.OCLC1249712936.
- ^Shinn, David H.;Eisenman, Joshua (2023).China's Relations with Africa: a New Era of Strategic Engagement.New York:Columbia University Press.doi:10.7312/shin21000.ISBN978-0-231-21001-0.JSTOR10.7312/shin21000.
