People’s Daily:
Mr. Xin, capacity cooperation is an important part of the Belt and Road Initiative. You just introduced the work the MIIT has done. My questions are: What achievements has the MIIT made in regard to international capacity cooperation and what is the latest situation? What can we expect from this summit? Thank you.
Xin Guobin:
Countries along the Belt and Road undoubtedly differ in resources, development stage and environment. However, they are economically complementary. So, there is a huge potential for cooperation. We have been sticking to the market-oriented principle, with companies being the main drivers, and promoted cooperation in the fields of capacity and equipment manufacturing by strengthening coordination to provide better services and support, as well as effectively linking China’s industrial and financial advantages with host country demands. Our goal is always to achieve win-win outcomes.
As for the capacity cooperation, we have organized relevant industrial associations and enterprises to cooperate with their counterparts in Saudi Arabia, the UAE, Malaysia and India, and instructed enterprises in the sectors of iron and steel, nonferrous metal and construction materials to open factories overseas. In 2016, the outbound investment of the manufacturing industry totaled US$31.06 billion, accounting for 18.3 percent of all such investment, up 6.2 percentage points from the year before. In addition, it’s worth mentioning that there were 197 mergers and acquisitions in the manufacturing sector. Here are some examples of our achievements. The program of Alliance Steel (M) Sdn Bhd, involving investment by Guangxi Beibu Gulf Port International Group Co., Ltd and Guangxi ShengLong Metallurgical Co. Ltd, started construction in Malaysia in 2014. HBIS Group Co.Ltd signed a contract with Industrial Development Corp of South Africa to set up a 5 million metric ton steel plant in that country. It also purchased Serbia’s Zeleara Smederevo steel mill. CRRC has conducted deep cooperation with Siemens, Voith Turbo and Deutsche Bahn in high-speed rail development and jointly explored the third-country market. These leading enterprises’ outbound moves have created jobs and generated tax revenue for the host countries and accelerated their industrial upgrading and industrialization process. Therefore, products made and services provided by China are welcome in more and more countries along the Belt and Road.
In future, we will continue to encourage Chinese enterprises to “go global,” following the overall arrangement and plan of the Belt and Road Initiative.
Reuters:
What is the total volume of investments in the “Belt and Road” projects so far? Would you please project how big the total investment will be in the next five years? Last year, China tightened scrutiny on capital outflows. Does this move have any impact on our outbound investment? Thank you.
Ning Jizhe:
As I mentioned just now, Chinese enterprises have invested more than US$60 billion in Belt and Road projects over the past four years – between 2013 and 2016. This is the figure that we can give to you. Some small investments may be not included.
Our outbound investment has been largely made by enterprises and driven by the market in line with business rules and international practices, rather than being planned. I should say it is not easy to predict the future, but we do have a projection for outbound investment for the next five years. China’s outbound investment will reach US$120 billion and even surpass US$130 billion each year over the next five years. Most of the investment will be put into Belt and Road projects. That will give a great impetus to the global recovery and liberalization of reciprocal investment and trade.
China’s management mechanism of outbound investment is based on market-oriented principles and international practices. Currently our outbound investment is subject to a registration mechanism. Also, we warn enterprises against potential risks and need to examine the veracity and compliance of their investment. Projects relating to the “Belt and Road” Initiative and industrial capacity cooperation will not be impacted by strengthened scrutiny but will proceed in a sound manner.