Chinese firms need 'going out' support mechanism

India detained several senior executives of Vivo India on the grounds that they were suspected of "money laundering". That should prompt the Chinese authorities to establish a systematic support mechanism to protect and raise the risk awareness of Chinese companies overseas. Some Chinese companies apparently lack experience to operate in complex overseas environments.

In 2022, China's foreign direct investment was $163.12 billion, ranking second in the world. By the end of 2022, China's foreign direct investment stock reached $2.75 trillion. Overseas investment involves many aspects, including those not directly related to business, such as diplomatic and political relations with the investment recipient country, as well as differences in culture, law and policies, and the respective market and security environments and other factors.

Japanese companies investing overseas have a support network that integrates government and business. For example, it combines government development assistance with corporate investment, and provides information and consulting services for corporate investment through the Japan External Trade Organization, Japan International Cooperation Agency, Japan Bank for International Cooperation, etc.

China should establish similar organizations to support enterprises in their overseas investments and provide assistance to enterprises in terms of information consultation and provide legal services. In particular, it should establish an overseas investment risk assessment system to provide reference for enterprises to avoid risks similar to those that Chinese companies are encountering in India.

The country should encourage financial institutions to expand globally and organize and coordinate financial institutions to provide services for Chinese companies to "go global". It can be said that Chinese enterprises going global is also a process of financial institutions going global.

Also, to ensure the safety of enterprises' overseas investments, more professional security companies need to be developed to provide security services.

Domestic enterprises with investments overseas should try their best to find ways to strengthen cooperation with each other. Small and medium-sized enterprises in particular should offer each other mutual assistance.

In short, improving the international competitiveness of Chinese enterprises requires not only scientific and technological advantages, but also management and organizational advantages.