China will make efforts to launch a new high-level opening-up process in 2014.
That's according to Premier Li Keqiang in a key government work report delivered at the ongoing session of China's parliament body in Beijing.
Observers say, the new round of opening-up could push China to build a more open economic structure, which will help it gain a competitive edge internationally.
The economic reform is also expected to drive more Chinese enterprises to establish or enlarge overseas investments.
This could help China's entrepreneurs play an increasingly important role in the global arena, but could also demand more from the ambitious firms.
In this report, we look at the status of Chinese companies' presence overseas, as well as how the success of their investment and expansion... could turn out to be mutually beneficial.
As China's high-speed rail network continues to amaze, overseas demand is growing for the country's train equipment and technology.
Also, more people around the world are living in cities and dealing with worsening traffic congestion, which means: more demand for subway and light-rail systems.
China CNR Corporation, one of China's biggest train makers, is taking the chance.
After decades of development, the state-owned manufacturer now does business in more than 70 countries.
Over the years, it gradually expanded business dealings from Asia, Africa to Latin America and Europe.
More recently, it signed contracts to produce 15 subway trains for the 2016 Olympic Games in Brazil.
YU WEIPING, Vice President of China CNR said,"For the company's total business volume, the overseas business accounts for 15 percent."
And this year's FIFA World Cup will be the first chance to ride in a Chinese-made metro train in a South American country.
The Vice President of China CNR, YU WEIPING says that "If we make a comparison, it's like CNR has won in Brazil's metro train 'World Cup', it means CNR's high-end equipment could have a large potential market in South America."
CNR is only one of thousands of Chinese enterprises that have made investments overseas, riding a tide of favorable policies in China, as the country steps up its opening-up drive.
Government data show Chinese firms have made investments in nearly 200 countries and regions.
Outbound investment from January to November last year was over 80 billion U.S. dollars, an increase of more than 28 percent compared with the same period in 2012.
According to the Ministry of Commerce, most of the funds went into mining, wholesaling, retailing, manufacturing and construction.
ROBERT PARTRIDGE, Ernst&Young mentions
"We've seen Chinese companies really invest a lot in all the major geographies, so the America, Australia where natural resources has certainly been desirable, but also cross Europe, western Europe, eastern Europe, sectors have of course been in natural resources, not just only in gas, but mining in metals, we've also seen the beginning of some consumer related: brands, financial services, certainly more so, take a little bit in America, a lot more cross in Europe, in Middle East."
But as more Chinese firms try to venture overseas, unfamiliar legal and business environments come as a dominant issue that threatens to thwart many such attempts.
"Many countries have many strict rules and limits regarding building local factories, using local suppliers and distributors. Secondly, law, culture and customs were another challenge. For example in some Islamic countries, employees must have Islamic origins; this enquires a lot of employee training. Thirdly, the standard is different, as in the United States, in Europe and in Russia, the standard varies." said YU WEIPING.
After entering the global market, many Chinese enterprises are shifting their focus from making cheap, labor-intensive products to quality and branding.
But as the firms try to move up the value chain, prejudice, or political and cultural resistance, would sometimes stand in the way.
JOE FOUDY, NYU Stern School of Business refers, "We see increasing investment from China in the world including in the United States, that’s with us and is here to stay and it’s only going to grow. I think the unique challenge that some Chinese companies face is the sensitivity of certain industries. The sensitivity really comes when you look at a household name, a firm that people grew up with, and that's a concern not just in the U.S. but in almost any country.”
Earlier this year, China's technology giant Lenovo agreed to buy handset maker Motorola from Google for 2.91 billion U.S. dollars, in what would be China's biggest technology acquisition to date.
In 2013, Lenovo became the world's largest PC maker, eight years after buying IBM's PC business.
Despite Lenovo's success, some other Chinese companies appear to be less lucky.
Late last year, China's telecom equipment maker Huawei indicated it was giving up on the U.S. market, after years of struggle to gain entrance.
The most devastating setback came in 2012, as a U.S. congressional report encouraged U.S. firms not to partner with Huawei, due to what it called "security concerns".
AU KING LUN, CEO, BOCHK Asset Management Ltd., HK directs,"I think technology, for example, is very sensitive area. There are already in the past cases of Chinese technology companies being barred from providing services in certain sector or in certain countries. I think that probably to time till western government to set some of these investments are generally for commercial reasons, but not have any political motivation behind it. But overtime I think the business interests, global business interest would provide... hopefully one day they will accept the investment from China, and understand the motivation behind it is really for commercial interests."
In order to overcome these difficulties, the Ernst & Young analyst suggests Chinese companies seek professional advice from international firms before they make crucial ventures abroad.
"Outside advices include law firms, include investment banks that help Chinese companies get better at this and make them more competitive in winning deals, but also as close transactions, value post closing and create value for shareholders, that also requires much more experience and when they try to build that, the best way is to bring in talent from the outside advises as well as more hiring people that have those goal."
And the Vice President of China CNR says, it's equally important that Chinese firms boost their own competitiveness, and put more effort on innovation.
"The core competitiveness of our enterprise lies in the master of core technologies, strong productivity and manufacturing process, as well as years of overseas experience. With all these advantages in technical research, more innovation will help us gain an upper hand when competing with other firms."
The Chinese government, in its Five-Year development plan that lasts until 2015, says the country's top economic strategy is to encourage more firms to expand overseas.
The Ministry of Commerce predicts the contract value of overseas projects will hit 180 billion U.S. dollars in 2015, almost doubling that of 2010.
"M&A from China outbound is gonna continue to grow, so the rest of the world does look at it well as economic forces across-border M&A, not yet threatening the level of the U.S., but meet the long term has the potential to do that, so it's the real part of the global economic landscape, and as that continues, then the trend flows continue to increase, further increasing in the importance of China in the global markets." ROBERT PARTRIDGE says.
With the government pledging more progress in opening up for 2014, more Chinese enterprises are expected to foster businesses overseas.
But before such moves are made, experts are calling on firms to get better prepared, and make their practices more attuned to the local investment climate.
Many are also calling for a more amicable environment internationally for talents to innovate, as the success of a business will not benefit the firm alone, but bring more tangible opportunities for locals.
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