General

"No matter how the world situation evolves, the global market is inseparable from Chinese construction, Chinese manufacturing, Chinese investment and Chinese services. Enterprises 'going out' face new challenges as well as new opportunities. Facing the turbulent world, Chinese enterprises must establish a solid foundation for external development. The overall security concept of investment and cooperation, and earnestly safeguard their own rights and interests." Shen Kaitao, chairman of Jiangtai International Cooperation Alliance, said at the 2022 Chinese Enterprises Going Global Risk Conference held on June 28.

Since 2022, the international situation has become increasingly severe. The conflict between Russia and Ukraine has led to major changes in the global political and economic landscape. The energy crisis, food crisis, and inflation have seriously endangered global security. In addition, the unbalanced and unstable policies and effects of epidemic prevention and control in various countries have dragged down the process of global economic recovery. In Shen Kaitao's view, these major risks have led to serious setbacks in global economic development and brought endless risks and challenges to Chinese companies' "going out". This is mainly reflected in the following aspects:

First, the conflict between Russia and Ukraine has intensified. The confrontation between the two camps has added more complicated factors to the “Belt and Road” cooperation, and it has become more difficult for Chinese companies to “go global”. The United States and Western developed countries restrict Chinese investment. With the popularity of the Internet, the barriers to security review and market access are getting higher and higher.

Second, global energy, grain, and raw material prices continue to rise, leading to the intensification of sovereign debt crises in some countries. The overseas operating costs of Chinese companies have increased significantly, and financial integration and investment returns are facing huge challenges.

Third, China's epidemic prevention and control has achieved remarkable results, which is in stark contrast to the current situation of repeated epidemics in some countries. The severe epidemic situation abroad has brought greater health risks to the employees of overseas Chinese companies. Coupled with the frequent traditional security risks, the resurgence of terrorism, and the deterioration of social security, overseas security risks are not optimistic.

In this context, Chinese enterprises need to establish an overall security concept for foreign investment and cooperation. In Shen Kaitao's view, establishing an overall security concept means that enterprises must implement the basic strategy of national security, ensure the development interests and security concerns of enterprises after "going out", and adhere to predictable, preventable and sustainable overseas security risks Management and protection of investment interests. Specifically, companies should do the following:

It is necessary to take into account both short-term risks and medium and long-term risks. Enterprises should not only focus on resolving current short-term risks, but also look at the medium and long-term environment of foreign investment and cooperation, take precautionary measures, make security risk prevention plans, and maintain the stability and sustainability of foreign investment and cooperation.

It is necessary to coordinate the maintenance of traditional security and non-traditional security. Under the major changes, traditional and non-traditional threats to security development are intertwined, superimposed and complicated. Enterprises should carry out comprehensive research and judgment on security risks to avoid focusing on one thing and losing another.

It is necessary to focus on integrating international rules and domestic regulations. Enterprises should give full play to the governance experience of domestic risk management and control, and build a safety barrier for "going out" development from a high starting point; at the same time, they should actively and consciously comply with international rules and local practices, follow the local customs, and avoid system conflicts, cultural conflicts and value conflicts.

It is necessary to balance the security of the enterprise itself and the security of the supply chain. "Going out" enterprises should link the maintenance of their own security with the stability of overseas industrial chains and supply chains, and with the sustainable operation of upstream and downstream enterprises, so as to create a safe and reliable operating environment.

Shen Kaitao also put forward three suggestions on how to establish an overall safety concept for enterprises:

First, enterprises must have a general pattern of security for foreign investment and cooperation. Comply with the general trend of national development and international changes, focus on the core security risk areas closely related to investment projects, comprehensively analyze the factors affecting security, and formulate scientific and security development plans.

Second, enterprises must have a risk prevention and control mindset of win-win cooperation. Focusing on major security risks in the field of foreign investment and cooperation, it is necessary to not only cooperate with stakeholders, but also strengthen cooperation with third-party professional institutions or platforms to enhance the anti-risk synergy of extensive consultation, joint construction and sharing.

Third, enterprises must rely on the concept of government public services. "Going out" enterprises generally have insufficient security assurance capabilities. They must consciously accept policy guidance, information consultation and professional training provided by government departments and entrusted professional institutions, and take the initiative to incorporate enterprise security risk prevention and control into the national overseas security cooperation system. Share overseas security service guarantees with a third-party global integrated service platform.

It is understood that the "2022 Chinese Enterprises Overseas Security Risk Prevention and Control Work Paradigm" released during this event mentioned that on the basis of consolidating existing security risk prevention and control work, Chinese enterprises should pay more attention to dealing with long-term risks and strengthen "Pan-security" risk research, proactively prevent regional supply chain risks, and scientifically coordinate the relationship between security and development. It is necessary to be more cautious about newly-invested overseas projects, and to carry out in-depth security risk assessment; for overseas invested projects, it is necessary to strengthen the prevention and control of security risks and prepare for response in advance.