Since the beginning of this year, China’s economic societies have resumed normal operations, and the economy has continued to recover, with a 5.5% economic growth in the first half3, meeting expectations. The momentum for Chinese companies to go abroad has also strengthened, as ODI continues to grow. Upcoming events in the second half of the year, such as the third Belt and Road Forum for International Cooperation and the inaugural China International Supply Chain Expo, will provide further platforms for international cooperation and development for Chinese companies.
Additionally, the recent release of the Chinese government’s Opinions on Promoting the Development and Growth of the Private Economy explicitly encourages private enterprises (POEs) to expand overseas operations and actively participate in the Belt and Road Initiative (BRI). It also outlines support for guiding and assisting private enterprises in countering external challenges such as trade protectionism, unilateralism, long-arm jurisdiction and enhancing coordination among relevant departments to establish risk prevention and resolution mechanisms for the safety of private entrepreneurs and their overseas interests. EY believes that these measures will give confidence and assurance for POEs to boldly go abroad. As China’s economic development continues to accumulate momentum, Chinese companies’ overseas expansion is expected to accelerate in the second half of the year. However, companies should remain cautious about external challenges, such as continuous slowdown in international market demand, weaker-than-expected global economic recovery, increasing scrutiny on foreign direct investments, and the recent volatility in the RMB exchange rate, which requires more attention.