China Business Guide 中 国 商 务 指 南 2009 （The Light Industry）

Xinji leather business in Hebei Province originated from Ming Dynasty and thrived in Qing Dynasty. Xinji leather industry has bloomed since 1978 when China Xinji Leather and Fur Garment City and Xinji Leather Industrial Zone were established with US$ 345 million and intensive scale operation was realized. There are totally 1,438 leather enterprises in the city employing 60,000 persons, among which 191 are scale enterprises. They are mainly engaged in the production and operation of over 200 varieties such as leather, fur, leatherwear, fur wear, nick garment, fashion cold protective clothing, case and bag, glove, fur collar. As the largest leather production and marketing center in China, Xinji has established industrial chains of production sales, marketing, raw hide trade, raw and auxiliary material, modern logistics, information service and auxiliary industry of leather, dressmaking, finished piece making, leather machining, fur material. The major products sheepskin clothing leather and clothes stand for the advanced level of China, widely sold all over China and exported to dozens of countries and regions such as Russia, Korea, Japan, Europe and America and East Asia etc. In 2001, Xinji won the title of China Leather and Fur Garment City issued by China Light Industry Council and China Leather Industry Association. In 2004, the overall industry generated sales revenue of US$ 928 million and foreign export exchange US$ 406 million. Leather industry has become the pillar industry in Xinji city.

Established in 1993, China Xinji Leather City is the largest leather garment production and trading center in China. It covers a total area of 100 hectares and a building area of 1.3 million m². The total fixed asset investment stood at US$ 170 million. It owns 975 garment making enterprises and 194 finished pieces making enterprises. In 2004, it produced 6 million leather garments, 17 million finished pieces and generated sales revenue of US$ 480 million. The major products vary in more than 100 types of 4 series including sheepskin garment, fur garment, nick garment, fashion cold protective clothing. Shulan leather garment won the title of China Famous Brand Product; Pilot and Yiluqi won the title of National Free-Inspection Product; Ximan and Shulan have reaped the laurel of China Genuine Leather Mark for 4 consecutive years. 30 leather garment enterprises with 32 brands are allowed to wear China Genuine Mark, accounting for 25% of total accessible enterprises in China. 18 enterprises have obtained ISO90000 serial product certification. The Leather City was awarded as Top 10 Specialized Markets and Famous Market to Promote Feature Industry by Hebei Provincial Government, and Demonstration Plot of China Township Enterprises by Ministry of Agriculture.

Founded in 1997, Xinji Leather Industrial Zone is an environment-friendly industrial processing zone built with the help of United Nations. It covers a total area of 110 hectares and a building area of 900,000 m². The total fixed asset investment stood at US$ 160 million. It owns103 garment making enterprises, among which, 79 are large scale enterprises. In 2004, it produced 36 million all kinds of sheepskin leather pieces and generated an output value of US$ 448 million. Recently it has developed cow leather, sofa leather and luggage leather. Dongming Group, Pilot, Hongsihai and Tengyue company have been allowed to wear Genuine Leather Mark Eco-Leather, accounting for 23.5% of whole China. 5 enterprises obtained ISO9000 serial product certification. Leather making zone has invested US$ 22 million to build up leather making sewage treatment facility at of factory, zone and municipal levels, with sewage up to discharge standard. With dewatered sludge firing pavement bricks, its sewage treatment level tops China. This zone has become leather making environment-friendly base with the largest scale, top quality, complete varieties and the best sewage treatment.

8.3 China Sports Shoes Production Base-Jinjiang, Fujian

Jinjiang City in Fujian Province is an important walking shoes and sports shoes production base in China. Some shoe-making enterprises in Jinjiang put emphasis on creating self-owned brands and promote product quality. They take technology progress as a lead, pay attention to technology upgrading investment and introduce senior talents and advanced technology to promote upgrading and updating of products.

20 years ago, Jinjiang shoe-making industry seized the opportunity of international industrial transfer, obtained competing advantages depending on local labor resources and created a miracle of fast development. At present, shoes industry has become a trump card among Jinjiang serial industries. There are more than 3000 shoes enterprises in the city, 445 shoes export enterprises. More than 350,000 employees in total produce over 700 million pairs of all kinds of shoes every year with an annual output value over 20 billion yuan. Walking and sports shoes output accounts for 40% of China and 20% of the world. 60% of the products are sold internationally in over 80 countries and regions. A set of competitive products, such as Anta, Athletic, Airo, 361° and Xtep etc., enjoy a large market share and have become leading brands in this industry.

It's not exaggerating for all Jinjiang visitors to say to know Jinjiang from shoes. Entering Chendai Town, the major production base of Jinjiang shoe-making industry, you are in a world of shoes. Businessmen are everywhere at shoes shops in great numbers. Four main streets in shape of井 are filled with 600 shoes shops, forming miles-long market integrating retails of shoes and materials, storage and transportation shoe machine exhibition and sales. Chendai shoe material market, together with Dongguan in Guangzhou and Wenzhou in Zhejiang are China's top three markets of shoe materials. Nothing related to shoes is wanting here, from shoe machine to spikes and buttons. Various shoes advertisement everywhere on the house roof or the wayside etc. dazzles the walker's eyes. This market has attracted shoe machine and material businessmen from over 30 countries and regions to run business here. With an annual transaction volume exceeding 8 billion yuan, Chendai Town has become the largest shoe material market in east China.

In 1980s, Jinjiang people made shoes with traditional tools such as sinkers, scissors and sewing machine etc. They produced bead slippers and vulcanized shoes which required small investment and common technology mainly in home workshops in an extensive production manner, and, generated low benefits. Since 1990s, Jinjiang shoe-making industry introduced advanced production equipment at home and abroad in joint venture manner and stepped into the fast lane by increasing investment, enlarging operation scale. As long as brand becomes the main consumption orientation, some strong and insightful enterprises in Jinjiang give priority to creating self-owned brands and promote product quality. They take technology progress as a lead, pay attention to technology upgrading investment and introduce senior talents and advanced technology to promote upgrading and updating of products. By the end of 2003, Jinjiang set up a State Key Laboratory for Shoes Inspection. The awakening of brand awareness brought about the brand creation upsurge in Jinjiang shoes industry. The brand strategy promoted by the city served as a foundation for its industry to transfer from product operation to brand operation. At present, the industry in Jinjiang owns 32 China Famous Trademarks and China Famous Brand Products, accounting for more than half of China's sports shoes industry. There are also over 60 brands selected as Fujian Famous Brands and Trademarks. More than 30 enterprises established over 100 business branches in over 20 countries and regions like USA and Russia. Enterprises such as Anta own thousands sales outlets and exclusive stores in large and medium cities in China. In 2003, Jinjiang brand gave a collective shot to global market and set up China Shoes City Jinjiang Street in Asian Center, Budapest, Hungary, where more than 30 shoes-making enterprises in Jinjiang opened production and sales alliance relationships with internationally well-known brands.

8.4 China Stationary City-Ningbo, Zhejiang

Stationary industry has always been the featured traditional competitive industry in Ningbo City, Zhejiang Province. Due to the sustainable fast and harmonious development since the reform and opening up, especially recent years, the city has 2,767 stationary making enterprises with nearly 100,000 employees. The products cover extensive varieties of ten thousand types in 11 categories such as writing instrument, paper production, metal stationary, file keeping product, chemical stationary, teaching instrument, student articles, office appliance, office supplies and office equipment. In 2004, stationary in Ningbo generated sales revenue 17.2 billion yuan, up by 32% than last year. Its output accounted for 1/6 of China's total output. The gross foreign export value stood at US$ 1.6 billion, accounting for 1/3 of China's stationary export. Meanwhile, Ningbo stationary industry has various stationary manufacturing enterprises who have won individual prizes, for instance, pen of Beifa Group, paper products of Guangbo, teaching instrument of Huamao Group, sharpener of Deli, poker of AAA, art materials of Conda, office equipment of Jielisi. Their sales revenue all rank first in the same sector in China. Compared with other major stationary origins in the country, Ningbo stationary industry have following first-strike advantages: first, leading enterprises gather here and products varieties are complete; second, marketability and products outlet trend are strong; third, investment on technology innovation is large and design and development capacity is strong; fourth, massive economy is obvious with industry accumulative effect; fifth, actively promote international strategies and promote those of high quality which are grounded to accumulate brands and integrate resources. In 2005, Ningbo won the featured economic area honorable title of China Stationary City jointly issued by China Light Industry Council, China Stationary & Sporting Goods Association and China Writing Instrument Association.

The international competitiveness of Ningbo stationary industry has also been promoted remarkably. There are currently more than 150 stationary production enterprises with self-support import and export business right. They set up 154 overseas branches. Some large enterprises build up partnerships with world top 500 companies. Some of their products even tread government procurement system in European and American countries. The city set up a goal to generate 40 billion yuan gross stationary sales revenue by 2010, among which gross export value US$ 3.6 billion. kE9湖北商标专利网

8.5 Hometown of Chinese Folk Arts & Crafts-Fengxiang, Shaanxi

Fengxiang County in Shaanxi Province was regarded as Hometown of Chinese Folk Arts & Crafts in 2007. Fengxiang County is well-known at home and abroad for painted clay figurines, wood paintings, paper-cuts, embroidery, shadow figures, straw plaiting, gilding lacquer wear etc. Painted clay figurines, commonly referred to as clay stuff, becomes more and more popular. Many foreign and domestic visitors in Fengxiang will buy several authentic clay toys and accessories to add some art mood for their house. Fengxiang painted clay fugurines initiated from folks. The pottery figurines unearthed from graves of Spring and Autumn and Warring States period, Han and Tang Dynasty here are all buried with clay fugurines. The clay fugurines artists are mainly located in Liuying Village in Chengguan Town and the surrounding area. Painted clay fugurines is divided into three categories: clay toys, mainly shaped in animals especially 12 symbolic animals associated with a 12 year cycle; hanging ornaments, such as facial masks, tiger head, ox head, lion head, Kylin sending a son, and eight immortals crossing the sea; standing figure sculpture, mainly figures in folk legends and history stories. There are more than 170 designs and varieties from large crouching tiger as one meter high to small rabbit and lion facial mask ornament as small as one square inch. Clay, whitening, cotton and leather glue etc. are used in the process. The painted clay figurines are unique among various folk clay sculptures in China because of their refined and exaggerating models, elegant decorations, beautiful colors, naïve and vivid shapes. Local people put them at home to pray for a son, protect life, exorcise evil spirits, bless the house, and call for food fortune. Before 1960s, hundreds of farm families in Liuying Village and surrounding areas produced clay figurines. But later as the market shrinking, only some artisans including Hushen, Hu Xinmin, Hu Yongxing, Han Suocun and Duyin took up clay figurines at slack farming season. Along with the tourism blooming, people became more and more interested in traditional cultural arts & crafts, thus Fengxiang painted clay figurines encountered another thrive. Clay figure horse and sheep, created by Hu Xinmin, Shaanxi first class artist and China folk clay sculpture artist, were selected as 2002 and 2003 China stamps with twelve animals. His former design Longevity Pig was printed on 2007 stamps by China Post. Fengxiang painted clay figurines went overseas and famous in the world. The increasing sales revenue has become the primary income source of local farmers. At present, there are more than 260 people making clay figurines only in Liuying Village who generate more than 3 million yuan every year.

Fengxiang painted clay sculpture are valuable in terms of folk culture, folk art and aesthetics research and eye-catching for many experts. However, under the influence of commerce environment, some clay figurines artisans limit production to market ability and just go all the way to meet market demands. As a result, many traditional products are threatened with extinction while the craft lost its original culture connotation. In 1980s, Fengxiang paper-cut was so famous that paper-cut artisans went to USA for performance and aroused big splash there. Xifu Folk Art Garden will show the customs and culture essence in Fengxiang, Xifu and Northwest and hereby drive tourism development in Fengxiang and the surrounding areas.

8.6 China Plastic Trading Town-Lecong, Guangdong

Guangdong Lecong plastic market initiated from 1990s as one of the earliest plastic specialized markets formed spontaneously. At that time, plastics business mainly focused in Tengchong with only scattered berths. There were only over 80 business merchants around 2000 with mere influence. In 2002, under the support and guidance of Lecong government, guerilla-like plastic companies reorganized to be a group army. Led by Lecong government in the same year, the original Defu Furniture World was conversed to Lecong Defu Plastic Market for centralized operation and intensive development. Plastic companies increased to more than 300 after several months.

With ten years' operation, Lecong Plastic Market has established good customer foundation and business creditworthiness and outstood from domestic market. At present, Lecong Plastic Market covers a total area of over 600,000 m². There are over 600 companies and berths with an annual trading capacity of more than 2 million tons. The market has made great contribution to promoting market rational allocation rate of plastic material resources in Guangdong and even China and promoting balanced development of plastic processing industry. With the top total area, scale and sales volume in China, Lecong Plastic Market is among the largest plastic raw material distributing center and logistics center. Its sales network covers the whole country. There is a saying Lecong means plastics in south China. Currently, Lecong Plastic Market ranks first in plastic material trading volume. Its price quotations have become the policy making basis for the business insiders. The market is an important barometer of plastic industry in south China and the whole country. In October 2006, Lecong won the honorable title of China Plastic Trading Town issued by China Plastics Processing Industry Association Expert Group after assessment. Lecong plastic trading had opened a brand new era. The region brand gave rise to qualitative promotion.

8.7 China City of Hardware-Yongkang, Zhejiang

Located in the middle of Zhejiang Province, Yongkang City covers a total area of 1,049 square kilometers. Upgraded from a county, it now administers ten towns and economic development zone with 560,000 resident population. The city enjoys a very advanced and modern transportation network including Jinwen railway (from Jinzhou to Wenzhou), Jinliwen expressway, and 330 national highway. In this place in history, Ding was casted the Yellow Emperor; sword was forged in the Spring and Autumn Period; bow was created in Han Dynasty; bronze gun was made in Tang Dynasty. Yongkang is a hardware distributing center well-known at home and abroad. There is an old saying that hardware artisans go here and there and bring Yongkang hardware craft to everywhere. Yongkang has a long history of hardware dating back to the Yellow Emperor time, 5000 years ago. The Yellow Emperor lived on Shicheng Mountain in the south of current Yongkang. He made pills of immortality and casted the Yellow Emperor Ding. Since that time, smelting was planted as a seed in Yongkang till now. In Song Dynasty, there were a lot of coppersmith, blacksmith and tinsmith who traveled extensively. During the early days since foundation of P.R.C., 20,000 Yongkang artisans made a living on both sides of the Yangtze River and the Great Wall.

Yongkang industry is very developed. Non-public economy, including self-employed business and private sector, is vital and accounts for 9/10 of the overall economic aggregate. A modern industrial system is basically formed covering extensive fields, mainly entered in hardware, machine, trolley, diesel engine, electric tools, weighing apparatus, non-ferrous metal metallurgy, automobile fitting and motor fitting, household appliance and refined chemistry. China Science and Technology Hardware City has become the largest hardware distributing center with various functions and strong radiation ability. It will be the R & D and pilot base of China hardware science and technology, hardware product information center and technology exchange center. Hardware Science and Technology Industrial Park under construction will energize Yongkang economic surge.

The numbers and gross output of hardware mechanical enterprises account for over 80% in Yongkang. Hardware products reach 20000 (among which foreign exchange export products 1200) such as electric tools, hardware for daily use, construction and home use, hardware tools, garden instrument. It is well stocked with all kinds of things ranging from automobile, agricultural vehicle, walking tractor, and motor, to spoon, water faucet, vacuum cup, scooter and serial tableware. They are popular with customers at home and abroad for high quality, low price, beautiful appearance and utility. Some have become knockout products with regional features and enjoy high reputation in domestic and foreign markets, such as security door, electric tool, derivative agricultural transport trolley, copper product rolling, steel drum packing, automobile and motorcycle fitting, weighing apparatus and fittings, stainless steel product, vacuum cup and Yongkang four knives (rasp, scissor, kitchen knife and planer tool) etc.

8.8 China Capital of Kites -Weifang, Shandong

Weifang of Shandong Province is the Capital of Kites of the World and China. Long historic culture, simple folkway and beautiful scenery form a unique tourism style in Weifang. The Long Folkway Travelling Route in Weifang, together with International Kite Festival, is attracting more and more visitors.

Located in the middle of Shandong Province, Weifang enjoys very convenient transportation. There is Jiaoji railway in the south to Jinan in west, Qingdao, Yantai and Weihai in east. Jiqing express crosses the north of Weifang downtown. It takes two hours from Jinan, the capital of Shandong Province to Weifang either by train or by bus.

On the Long Folkway Traveling Route, kites are the most eye-catching. Weifang's kites have a long history. According to The Record of Wei County, kites came into being and became popular as early as A.D. 960 in Song dynasty. Until now Weifang's kites have earned high reputation at home and abroad. In the book Science and Civilization in China by Joseph Needham, the famous Britain scholar, kites was listed as an important innovation from China to Europe.

After years' development, Weifang's kites become rich and varied. Simple household workshop turn to large scale kites production factories. The kite shapes vary from small animals like double swallows, eagle, dragonfly, and butterfly to vivid figures.

Weifang people are almost crazy about kites. Every spring, Weifang becomes a world of kites. In the sky, uncountable kites are flying with soft wind. International Kite Festival has been held here every year since 1984. In 1988, Weifang was elected "the Capital of Kites of the World." Then, in 1989, the headquarters of the International Federation of Kites was set up here. Weifang was more famous. The Festival attracts a lot of foreign and domestic visitors to travel and do business in Weifang every year.

8.9 Food City of China-Luohe, Henan

Luohe is a young and beautiful city on wide Henan south plain. In recent years, the up surging food industry has came to the fore as an eye-catching card of Luohe. On October 15^th 2001, Shineway quality-assured meat from Luohe was designated as exclusive meat for the famous APEC in Shanghai. In 2002, Luohe frozen pork export made another high record, accounting for over 85% of the total volume in the province, stepping close to Sichuan, the first province in domestic frozen port export. During the Spring Festival in 2003, Shineway quality-assured meat and green vegetables from Longyun Group in Luohe, Henan were widely served on tables and aroused praise from Beijing citizens. In the same year, the production and sales revenue of Shineway Group both exceeded 10 billion yuan, which made it the only one in domestic meat processing industry.

In order to create scale advantage and enhance competitiveness, Luohe City actively leads small and medium food enterprises to develop in industrial clusters to form a collaborating network which is complementing to and on a par with industry leading enterprises. The government plays a role of planner and leader to formulate a series of food industrial park development programs. At the present time, a group of parks such as Shineway food industrial park, Third Ring Road Food Mall, and Aodeli industrial park begin to take shape. Four industrial chains are effectively driving the rapid economic growth of the city. Currently, a special industrial cluster phenomenon comes into being in Luohe: 140 food enterprises above scale are scattered in such an inland city with only 2.5 million population, accounting for 40% the overall industrial enterprises in the whole city; more than 50 food series of thousand types are involved; more than 130,000 people are employed, accounting for 40% of all employees. Annually processed food reach 5 million tons, among which, meat product 1 million ton, accounting for 35.7% of the whole province; annually slaughtered pigs reach 14 million, 4.5 times of slaughter volume in the whole city; annually processed and transformed grain reaches 3 million tons, 205 times of total grain output in the whole city; 600,000 tons of drinks are produced here. Luohe has become the largest meat product processing base, an important grain processing base in China, and an important drinks base in Middle China. Luohe boasts one China food industrial park, five provincial level food industrial parks, and two counties of top 500 counties in food industry. During the tenth five-year plan period, food industry in Luohe kept increasing faster than 20%.

8.10 Porcelain Capital of China-Jingdezhen, Jiangxi

Jiangdezhen is one of China's most famous cultural and historic cities. Situated in the south of Yangtz River, it earned a name of Heroic Town in South of the River. Jingdezhen and other three towns, Zhuxianzhen in Henan Province, Hankouzhen in Hubei Province and Fushanzhen in Guangdong Province, were listed as the Top Four Towns of China. It is one of the 24 historic cultural towns and national class A opening up cities firstly issued by State Council. In June, 1953, Jingdezhen became a municipality directly under the provincial government upon the approval of Government Administration Council. It covers a total area of 5,256 square kilometers and a population of 1.52 million, of which over 400,000 in downtown. Leping City, Fuliang County, Changjiang District and Zhushan District are under its jurisdiction.

Jingdezhen is the capital of porcelain known both in China and overseas. It owns a long porcelain history and profound cultural connotation. According to historical books Xinping porcelain initiated from Han Dynasty. In 1004, Emperor Jingde of Song Dynasty decreed to produce the porcelain used by the imperial court. From then on, people began to call this place as Jingdezhen. Successive emperors from Yuan Dynasty to Ming & Qing Dynasties all sent officials here to supervise the manufacture of ceramics for palace. They set up kilns and created numberless ceramic masterworks. Four ceramics of blue and white porcelain, colored porcelain, exquisite Porcelain and colored glaze porcelain are extremely famous. Porcelain Used by Mao Zedong, porcelain used on APEC Shanghai and state guesthouse and various art ceramics have won great praise. Jingdezhen porcelain has earned a high reputation of "white like jade, bright as a mirror, thin as paper, sound like a chime." With its elegant form and unique technique, the art of Jindezhen porcelain is a bright jade in the Chinese civilization. The Chinese writer Guo Moruo once acclaimed the splendid porcelain history and culture in Jingdezhen by saying, "The best porcelain of the world is in China, and China's best is in Jingdezhen". Porcelain connects closely Jingdezhen with the world.

Chapter 9 China's Light Industry Going Out

At present, China's opening up has stepped into a new historic era. China actively implements foreign investment strategy with a better blend to introduce in and go out. In October 2000, Chinese government officially put forward go-out strategy as an important content of basic national policy in opening up during the tenth five-year period. Go-out strategy is a significant measure of China to adopt itself to economic globalization and further improve opening up level. From national strategic perspective, China formulates policies and encourages dominant enterprises to invest abroad, carry out processing trade, cooperate in developing resources, promote international project contracting and expand labor service export. China encourages and supports enterprises of various ownership to invest abroad to promote goods and labor export and form a number of strong multinational enterprises and brand names as early as possible.

9.1 Going-Out Strategy of Chinese Enterprises Makes Brilliant Achievement

Along with the in-depth development of economic globalization and integration, all countries in the world are involved more closely in economic globalization tide. Since entering WTO successfully, China has intimately combined its up surging open economy with global economy. China is active in introducing in while a group of outstanding enterprises are active in going out. Chinese enterprises are now playing a more and more important role in global economy. Based on local accumulation and growing up, they are going outward from China to take the opportunities and challenges of global market. During the implementation of go-out strategy for years, Chinese enterprises almost double in growth every year. The years 2003 and 2004 were the starting point of a new era to go-out due to specific policies issued by Chinese government to encourage enterprises. In 2004, a significant year of Chinese enterprises, Lenovo Group acquired IBMPC. TCL, a Chinese household appliance enterprise, acquired French Thomson.

In addition, Chinese foreign direct investment in current years is outstandingly featured in diversification pattern of investment subjects. According to the industrial distribution of domestic investment subjects, manufacturing industry accounts for 45.5% of total investment subjects, mainly involved in textile garment, shoes and cap making, textile, communication equipment, computer and other electric equipment manufacturing, electric machine and equipment manufacturing, handiwork and other manufacturing and medicine manufacturing etc. In 2008, China foreign project contracting generated a turnover of US$ 56.6 billion. The new signed contracts value US$ 104.6 billion, increasing around 35%.

Since reform and opening up, China's light industry took the lead to open up from closure and achieved great-leap-forward development by introducing advanced technology and management modes. With an eye to international market, light industry enhances the implementation of go-out strategy and performs actively in various international competition and cooperation. Go-out plays an important part to promote national economy and develop foreign relationships. Through go-out strategy, China has formed several crude oil and mineral resources bases from which has obtained oil, mineral, wood and fishing needed by national economy and social development. Chinese enterprises abroad are involved in improvement trade such as household appliance, mechanical and electrical products, textile, garment and light industry, which have promoted domestic industrial structure adjustment. Chinese enterprises go out and carry out economic cooperation in nearly 200 countries and regions. It benefits host countries in economic development, employment, and increasing tax and realizes mutual benefit and promote common development. It gains widespread popularity with all countries especially various developing countries. Go-out strategy implementation is playing a more obvious role in relieving domestic resource shortage, promoting industrial restructuring, expanding export, increasing employment, and improving foreign friendly cooperation relationships etc.

9.2 Chinese Government Issuing Policies to Encourage Enterprises to Go Out

Capital is flowing among countries with economic globalization to realize optical allocation in a larger scope and help enterprises look for all kinds of investment opportunities globally to achieve their profit goals. In the current process of developing overseas investment, the government plays a role as a guide and servant. Overseas investment expansion and its mode evolution of Chinese enterprises indicate that more favorable national foreign policies provide necessary policy support and financial aid. Go-out strategy was clearly presented at the 5^th Plenary Session of the 15th Central Committee of the Chinese Communist Party in October 2000. The session discussed and approved Suggestion on Making the 11th Five-year Plan in the 5th Plenary Session of the 16th Central Committee of the Party. The Suggestion made it clear that during the tenth five-year and even longer it was important to implement go-out strategy. It specified a direction for the development of China's foreign investment in the five years hereafter and created a good policy environment for enterprises to go out.

In October 2004, the government issued Giving Credit Support to the Key Overseas Investment Projects Encouraged by the State. It is a specified supporting measure of China to promote overseas direct investment. In October 2002, the original Ministry of Foreign Trade and Economic Cooperation issued successively Interim Measures for Joint Annual Inspection of Overseas Investment and Measures for Overseas Investment Comprehensive Performance Evaluation (Trial). In December 2004, Ministry of Commerce transmitted a Circular of on Printing and Distributing the System of Reporting Country Investment and Operation Obstacles. At the 5th Plenary Session of the 16th Central Committee of the Chinese Communist Party in October 2005, Suggestion on Making the 11th Five-year Plan of Central Committee of the Party pointed out reform and opening up must be deepened and mutual beneficial strategies must be implemented. China should support capable enterprises to go out and invest overseas in accordance with international prevailing rules, encourage overseas project contracting and labor export, expand mutual beneficial co-operation and common development. In October 2006, the State Council issued Opinions on Encouraging and Regulating Overseas Investment Cooperation of Chinese Enterprises, as the first programmatic guidance document that encourages and regulates comprehensively and systematically overseas investment since go-out strategy was proposed by the central government. It created a good policy environment for Chinese enterprises to develop overseas. In 2007, Ministry of Commerce jointly with relevant departments made go-out plan, clarify priority to ensure healthy development of go-out strategy. The government issued supporting policies in investment, foreign exchange, insurance and tax etc. State Taxation Administration will create good environment for domestic enterprises to invest overseas in five aspects. China will improve taxation policy and promote overseas investment. At present, China has established economic and trade cooperation relationships with over 220 countries and regions in a diversified market pattern. Ministry of Commerce recently issued Overseas Investment Management Rules to further improve overseas investment management system, facilitate overseas investment, support Chinese enterprises to go out and take international economic cooperation and competition. Compared with the existing provision, Overseas Investment Management Rules reserved approval rights only limited to few major overseas investments and the approval procedure of overseas investment is greatly simplified.

China overseas investment projects refers to various industries including agriculture, forestry, husbandry and fishing, energy, light industry, communication, electrics, transportation, real estate, tourism, finance, and consultancy. Investment manners are also versatile and flexible. In addition to new projects, overseas acquirement projects account for a quarter. Investment subjects tend to diversify from state-owned enterprises to private holding enterprises whose projects account for 1/5 of the total. Chinese enterprise go-out progress is still on its preliminary stage. On the premise of giving full play to market mechanism, the country will support Chinese enterprises including financial enterprises to develop overseas investment cooperation and improve policy environment in four aspects. The market subject role of Chinese enterprises in go-out process needs to be enhanced through system change and legal construction intensification. The government shall provide more standard procedure and efficient service for enterprises to invest overseas. It shall formulate relevant plans and industrial country origin guidance policies based on national conditions to connect overseas investment with domestic industrial structure optimization. It attaches great importance to culture go-out market subject. The government shall improve financial and foreign exchange policies and encourage dominant enterprises to develop overseas investment and multinational operation. The enterprises going overseas shall operate according to local laws, fulfill necessary social responsibilities including ensuring the legal rights of local employees and local partners.

9.3 China's Foreign Direct Investment in 2008

2008 witnessed remarkable adjustment in China's foreign-related business. In the first half of the year, the government continued export structure adjustment and optimization measure and made distinct achievements. In the second half, along with sudden aggravating of international economic financial situation, the government timely issued a series of foreign-related economic policies to relieve export difficulties and maintain stable increase of foreign trade.

According to China´s Balance of Payments Report 2008, China's foreign direct investment in 2008 stood at US$ 55.6 billion, up by 194% than the previous year. Repatriation including liquidation and divestment of foreign direct investment reached US2.2 billion, up by 13%. The net outflow reached US$ 53.5 billion, up by 215%. In terms of department structure, China's foreign direct investment of non-financial departments reached US$ 40.7 billion and financial departments reached US$ 14.9 billion in 2008.

In terms of investment destination, China's foreign direct investment of non-financial departments goes orderly from Asia, Latin America, Oceania, North America, Africa and Europe with a proportion in each area consecutively as 77%, 10%, 5%, 4%, 3% and 1%. Foreign direct investment of financial departments mainly focuses in areas such as USA and Hong Kong with more developed financial markets.