does not make it easier to succeed overseas.
The key to their own success and the purpose
of “transplanting and replicating China’s
development experience” is probably not to
copy all their practices at home, but to adapt
some practices to local conditions.
Together
Even before China joined the World Trade
Organisation in 2001, China adopted the
“go global” strategy to encourage Chinese
enterprises to invest in overseas markets. A
few, but not many, large Chinese compa-
nies built industrial parks mainly for their
own businesses. In 2006, China’s Minis-
try of Commerce declared a plan to build
50 industrial or hi-tech parks in overseas
host countries, which are collectively called
“overseas economic and trade cooperation
zones.” The original purpose at the time was
to reduce China’s fast-growing trade frictions
with other countries and reduce its then ex-
cessive foreign exchange reserves. Chinese
exporters were motivated to manufacture in
a third country to circumvent punitive tariffs
imposed on cheap Chinese imports by major
markets, particularly the US and European
Union. Another key reason for Chinese com-
panies to expand abroad would emerge: seek-
ing lower labour costs as domestic costs rose
fast.
The preference for choosing industrial
parks for expansion was largely due to the
bitterness of going it alone in unfamiliar envi-
ronments that Chinese enterprises had tasted
in previous years, according to Edward King-
son, director of the Brand Culture Depart-
ment of the Jiangsu-based HOdo Group, a
private garment company with outreach into
financial services. It began considering going
abroad in 2007 due to rising labour costs in
China. It now leads the investment and oper-
ation of the Sihanoukville Special Economic
Zone, the largest of its kind in Cambodia
now, in partnership with Cambodia Interna-
tional Investment Development Group Co.,
Ltd. The operators helped companies in the
park comply with local administrative pro-
cedures. The local Cambodian government
found the site to be an example of good prac-
tice and now the operators and local govern-
ment work together to offer one-stop services
for all companies in the park, including those
from the US, Japan and Cambodia. The
zone was launched in 2008 and has become
one of the first eight “national” overseas in-
dustrial parks approved by China’s Ministry
of Commerce.
China expects something more than bet-
ter trade conditions and lower costs from
going global as the country has grown to be
world’s largest manufacturing power with
its own full-fledged industrial supply chain
domestically. In the past two years, Chinese
enterprises have been eager to shift produc-
tion facilities to countries with lower costs, or
to buy companies with international brands
and leading-edge technology around the
world. Chinese leaders have kept promoting
the idea of international production capac-
ity cooperation in their travels around the
world and at international gatherings. China
has described the production capacity co-
operation a synergy of developed countries’
advanced know-how, China’s manufacturing
power and the demand for industrialisation
in less-developed countries. In various docu-
ments issued by China’s State Council, the
cabinet, and its ministries since 2015, China
expects the implementation of the vision to
boost the global market, build a global sup-
ply chain for Chinese enterprises, upgrade
China’s industry at home and improve Chi-
na’s say in the global supply chain.
Production capacity cooperation and over-
seas industrial parks have been listed as pri-
orities - either in parallel or interconnected -
in China’s roadmaps to realising the Belt and
Road initiative. The State Council’s guideline
issued in 2015 noted that production capac-
ity cooperation could facilitate the Belt and
Road initiative, and overseas industrial parks
could be an “innovative business model” to
this end by building a full supply chain on lo-
cation. At a meeting on the Belt and Road in
August 2016, Chinese President Xi Jinping
called for the implementation of key projects
by focusing on infrastructure connectivity,
international production capacity and coop-
erative industrial parks. In November 2016,seven Chinese ministries jointly declared
guidelines on improving China’s position in
the global value chain. It urged “taking the
opportunities of implementing the Belt and
Road initiative and the international coop-
eration on production capability” to push
forward the “go abroad” concept. One of the
platforms was overseas industrial parks.
Guo Jianmin, an official at the NDRC
International Cooperation Centre, believes
overseas industrial parks are the most impor-
tant platform – at least so far – for China’s
international cooperation on production
capacity, and provide a more effective way
to build a China-led global supply chain,
compared with doing this by individual
companies. As he told ChinaReport at a re-
cent forum held by the Institute of Global
Development of Tsinghua University, the
choice of this model was based on the com-
bination of China’s own experience in trying
new things during its economic take-off and
the host countries’ strong interest in learning
from this experience.More on the Road
In a video interview with china.com.cn in
September 2014, Fang Wei, vice director of
the Department of Outward Investment and
Economic Cooperation of China’s Ministry
of Commerce, disclosed that there were only
nine “national” overseas industrial parks at
that point, eight years since the announce-
ment of the plan to build 50 such overseas
parks. This means 11 out of the 20 current
“national” overseas parks have been built in
the two years or so since the interview.
It can be partly explained by the fast-
growing abilities of Chinese companies to
go global in the past two years. But the Belt
and Road initiative also provides good pros-
pects for these overseas, cooperative indus-
trial parks. Kingson, with the Sihanoukville
Special Economic Zone, told ChinaReport
that the initiative has made overseas parks
more attractive and better-known than ever
to Chinese enterprises interested in going
abroad. For example, increased investment
in transportation infrastructure since the ini-
tiative was proposed has shortened the travel