Trade Development: Globalization of Chinese Companies: The Role of Global Ports

1. Trade Development: Globalization of Chinese Companies: The Role of Global Ports

2. GIL / Zeebrugge / Virginia Joint Research Program Globalization of Chinese Companies: The Role of Global Ports

3. Chinese Company Going Global • $2 trillion in direct Chinese investment will flow worldwide by 2020! • -DANIEL H. ROSEN AND THILO HANEMANN 2011

4. China OFDI - Background • Until 2000, Outward Foreign Direct Investment (OFDI) from China was negligible. Premier Zhu Rongjiofficially announced that overseas investment would be one of the main objectives of the government’s 10th Five Year Plan (2001-05), giving birth to a “Go Global” strategy. • Premier WenJiabao reinforced the importance of overseas investment in the 11th FYP (2006-10) • The Government led strategy has proven to be effective. In 2006, yearly OFDI flow was 19 times that of 2000, growing at an average rate of 116% per year, dwarfing the average world OFDI growth of 6% over the same period. Premier Zhu Rongji Premier WenJiabao

7. State-owned Enterprises • State-owned Enterprises (SOE)s are run like private corporations, seeking to maximise profits. They made an estimated 1 trillion yuan ($150.83 billion) in net profits in 2010, or 50 per cent more than that of 2009. • SOEs holding approx. 84% of OFDI stock. • Strategic OFDI by SOEs also receives significant political backing. • China Development Bank which is designated as the ‘go-to’ bank to support Chinese forays abroad aim to disburse US$500 billion (S$640 billion) of overseas loans over the next five years and SOEs are its key customers.

8. Conference Agenda: • Speed up “Go Global” strategy by focusing on enhance State-owner companies International Competitiveness • Review State-owned companies “Go Global” strategy during the 11th Five Year Plan (FYP) • Preview challenges and opportunities for China State-owned during the 12th FYP State Companies “Go Global” Conference April, 2011 BEIJING

9. State-owned Enterprises • State-owned Enterprises (SOE)s holding approx. 84% of OFDI stock. • Strategic OFDI by SOEs also receives significant political backing. • Chinese OFDI Flows 1982–2009 • Billions of USD • Sources: Lane and Milesi-Ferretti (1981–2007); People’s Bank of China, State Administration of Foreign Exchange (2007–2009).

10. China Merchants Holdings International Co bought 47.5 percent stake in a container-terminal operator in Nigeria for $154million. November, 2010 China Merchants Holdings Invested $450million in Sri Lanka August, 2010 China Merchants Holdings Invested $1Billion to Setup China Merchants Vietnam September, 2008 GIL China Chairman: Dr. Fu’s China Merchants going global

11. CIMC in Belgium CHINA INTERNATIONAL MARINE CONTAINERS (GROUP) CO., LTD Legal representative / Chairman: Dr. Fu Yuning CIMC-BURG LAG Trailers NV Holvrieka Belgium

12. The King’s visit to CIMC-Burg The King of Belgium visited CIMC-Burg’s subsidiary LAG Company, 14th Feb 2008

13. Shanghai International Port (Group) Limited (SIPG), who are China’s largest port operator, the deal constitutes their first port investment outside of mainland China which bought them 25% stake in APM Terminals Zeebrugge N.V., . The deal, worth €27m, was signed on 28 May 2010. China Merchants Group Holds 30% share in SIPG Shanghai International Port (Group) Limited (SIPG) Invested in Port of Zeebrugge

14. GIL / Zeebrugge / Virginia met in Hong Kong, July 2011

15. GIL / Zeebrugge meeting with Tianjin TEDA Government Officials

16. Planned workshops over next two years: • Shanghai, China • Shenzhen, China • Zeebrugge, Belgium • Virginia, USA GIL / Zeebrugge / Virginia First Global China Workshop to be held in Tianjin in December, 2011

17. Joint report: • Globalization of Chinese Companies: Then Role of Global Ports • Total Five Global Workshop events • Three in China • Tianjin, Shanghai, Shenzhen • One in Zeebrugge, Belgium • One in Virginia, USA Deliverables