My previous blog post focused on Chinese limitations for international tech companies to partner with domestic firms. Oppositely, China hopes to help domestic firms spread influence globally to slow the current economic slowdown. The ruling State Council announced that the government should simplify the process through which companies set up overseas facilities and support investment outside of domestic reach. Apparently, restrictions and costs stand as a barrier for Chinese industry to reach out internationally. Premier Li Keqiang hopes to eliminate these obstacles to help boost growth.
Ironically, he supports partnerships with international firms to increase technical knowledge of domestic companies, who face slow market growth in China. In particular, consumer goods, railways, and nuclear energy represent sectors ready to make a global impact.
Developing countries appear to be a large market for China’s multitude of engineering firms with the knowledge and capability to provide necessary equipment and services for projects. This notion parallels the recent push by Beijing to foster a Silk Road that could connect the region’s countries through infrastructure investment. Previous blogs have touched on this initiative, which the Chinese President believes subsequent annual trade with such countries could reach $2.5 trillion in ten years.
Overall, these initiatives, which aim to increase Chinese presence and competitiveness on an international scale, represent fear of the economic slowdown and a desire to become a global “industry” powerhouse.