General

In order to promote state-owned enterprises to better "go out", it is urgent to clarify the current development situation and find the next development path and direction.

Since the reform and opening up, state-owned enterprises have actively implemented the "going out" strategy, and have deeply integrated into the global industrial chain supply chain network system, becoming the leading force for Chinese enterprises to make overseas investment. However, with the intensification of the anti-globalization trend, the frequent occurrence of geopolitical events and the impact of the 21st century epidemic and other multiple factors, the "going out" environment of state-owned enterprises has undergone complex and profound changes, and the requirements of countries around the world for the enterprise's standardized operation, localized management, corporate governance system, cross-cultural integration and other aspects continue to rise. In order to promote state-owned enterprises to better "go out", it is urgent to clarify the current development situation and find the next development path and direction.

1、 The new situation faced by state-owned enterprises in "going out"

First, the logic of "going out" has changed. In the past, under the principle of giving priority to efficiency, the business layout of multinational enterprises promoted the gradual formation of a interconnected and closely coupled network system in the global industrial chain supply chain. However, with the impact of geopolitics and epidemic situation, the supply chain system of the industry chain with fine division of labor has been impacted, and the vulnerability of the supply chain of the long chain industries such as automobiles, electronics and machinery has become prominent. Safety has become a more important factor to be considered in the layout of the supply chain of the industry chain, and promoting the diversified layout of the key links of the industry chain has become the choice of many multinational companies. For example, Apple, Qualcomm and other world-class enterprises have established supply chain systems around the world, replacing the past single supplier with a multi-supplier system, expanding the supply channels of raw materials and intermediate products, and dispersing the risk of supply chain being "cut off".

Second, the environment of "going out" has changed. In recent years, some developed countries, led by the United States, have forcibly cut the global supply chain established based on market rules, and built an industrial chain supply chain "alliance" with high ideological mutual recognition and strong controllability. For example, in June 2022, the United States established a "Mineral Security Partnership" (MSP) with Canada, Australia, Finland and other allies to form a "mineral group". On November 3 of the same year, the Canadian government asked China Mining (Hong Kong) Rare Metal Resources Co., Ltd. and other enterprises to sell their shares in Power Metal, Chile Lithium and Super Lithium on the grounds of "national security".

Third, the field of "going out" has changed. In the past, at the stage of rapid economic development, state-owned enterprises "going out" mainly aimed at large-scale and expanding business, and the investment and development fields were mainly natural resources with low added value and low technological content. At present, economic development is changing from a high-speed development stage to a high-quality development stage. Under the requirements of high-quality development and driven by the demand for industrial upgrading, state-owned enterprises are also changing from focusing on the acquisition of traditional natural resources to focusing on emerging industries. According to Bloomberg statistics, in 2021, the two areas where domestic enterprises invest the most are information technology industry and consumer medical industry, accounting for 36% and 28% respectively.

2、 Problems in "going out" of state-owned enterprises

After years of development of state-owned enterprises "going out", the level of international operation has been steadily improved and the global market competitiveness has been continuously improved. However, in recent years, in the process of "going out", state-owned enterprises still have problems that can not be ignored in the core competitiveness of enterprises, the construction of modern governance system, the acceptance of brand culture, and localized and standardized management.

The ability of disruptive innovation is relatively weak. Micro-innovation or incremental innovation can only allow enterprises to optimize under the existing rules of the game, can not form a competitive advantage that can be surpassed, and often will not become the leader of the industry. Throughout the world's top multinational enterprises, there is no one without strong innovation leadership. In contrast, Chinese enterprises tend to have strong micro-innovation capabilities, but weak disruptive innovation capabilities. Although the level of scientific and technological research and development of state-owned enterprises has been greatly improved after years of hard development and long-term investment, there is still a relatively significant gap compared with world-class multinational enterprises. According to the EU "2021 EU Industrial Research and Development Scoreboard", only one state-owned enterprise of CSCEC was listed in the top 50.

Brand culture recognition is slightly insufficient. The recognition and acceptance of brand culture will affect the global business layout and international competitiveness of multinational enterprises. Compared with today's world-class enterprises, the brand culture of state-owned enterprises still has a certain gap. According to the 2022 "World Top 500 Brands" compiled by GYbrand, an international authoritative brand value evaluation agency, in addition to commercial banks, insurance companies and other financial enterprises, only three state-owned enterprises including State Grid (16), China Mobile (33) and PetroChina (47) were listed in the top 50, while the United States occupied six of the top 10 (Apple, Google, Amazon, Microsoft, Wal-Mart and Facebook).

The modern corporate governance system needs to be further improved. Throughout the world's advanced multinational enterprises, Apple, Google, Tesla, Toyota and other world-renowned multinational enterprises have all established a highly scientific and humanized corporate governance system that conforms to the mainstream values of society. Compared with these transnational enterprises, some "going out" state-owned enterprises still have the "official standard" ideology, are accustomed to command management, have a strong sense of hierarchy, and have a strong sense of supervision and control over employees. This kind of corporate governance system is overseas, and the enterprise management mode cannot fully adapt to the foreign model and demand, which restricts the further development of the enterprise, especially in the developed country market, it is difficult to obtain the recognition of local employees.

The level of localized standardized management needs to be improved. Localization is the common practice of most multinational enterprises, and has become one of the important factors to enhance and measure the core competitiveness of enterprises. In recent years, although state-owned enterprises have achieved initial results in implementing localized compliance management in the "going out" international engineering business, there are still problems such as frequent compliance incidents with the host country, frequent conflicts between local employees and the Chinese management team, and high turnover rate of local employees.

3、 Suggestions on ways to promote state-owned enterprises to better "go out"

We will unswervingly promote high-level opening up, deepen the opening up and cooperation of state-owned enterprises, and create new advantages in opening up and cooperation. Open cooperation is an important way to achieve productivity development and scientific and technological progress. As an important market carrier of China's foreign economic cooperation, state-owned enterprises bear important responsibilities and missions in construction. On the one hand, state-owned enterprises should seize the opportunity of the "the Belt and Road" construction, focus on the joint construction of the "the Belt and Road", comprehensively enhance the strength and depth of foreign cooperation with countries along the line and overseas enterprises, work together to create a new platform for international trade cooperation, and add new impetus to the common development of the world. On the other hand, with the deepening of the new round of scientific and technological revolution and industrial transformation, energy upgrading and transformation has become a global consensus. In the process of foreign cooperation and exchange, state-owned enterprises should seize the opportunity of industrial transformation, focus on energy and resources cooperation, actively promote the construction of oil and gas pipelines, transmission lines and mineral resources development in countries along the line, and promote the formation of a new type of cooperation relationship that is shared, win-win and mutually beneficial.

Strengthen the legal and compliant operation of state-owned enterprises at home and abroad, and comprehensively promote the deep integration of domestic and international trade industrial chain. Improving the level of localized standardized management is a necessary condition for state-owned enterprises to "go out" and develop well in the host country's market. First, promote the localization and standardization of the company. Continue to promote the registration of companies in overseas and local areas, truly integrate into the local area from the company level, at the same time avoid the compliance risks brought by the use of the Group's brand, and promote local employment and local social and economic development. The second is to promote the localization and standardization of employees. Increase recruitment efforts and improve the localization ratio of human resources of overseas companies, which not only avoids the risk of limiting the employment ratio required by local laws, but also improves the efficiency of local resources utilization and quickly integrates into the local circle of friends. Third, promote the localization and standardization of the supply chain. Strengthening cooperation with local upstream and downstream enterprises, realizing deep integration with local industries, and forming an industrial closed-loop can not only strengthen the company's position in the overseas and local industrial chain, but also ensure that each link of the supply chain can achieve resource complementarity, mutual benefit and win-win results.

Create new demand through significant technological breakthroughs, expand the international trade market, and accelerate the transformation and upgrading of enterprises through high-end manufacturing of products. We should seize the opportunity of a new round of technological revolution and industrial transformation, drive the upgrading of product value through continuous breakthroughs in technology, lead high-end products with top technology, and enhance enterprise value with advanced products. First, we should strengthen basic research and cultivate and reserve innovation-led technologies. Focus on solving common basic problems in industrial development, lead the industry development trend and define and create market demand through disruptive innovation of technology and concepts. The second is to play a leading role in building an industrial ecosystem of upstream and downstream cooperation. Give full play to the ecological leading power of state-owned enterprises, build a service platform for docking achievements, and jointly promote the transfer and transformation of scientific and technological achievements, so that the achievements of scientific and technological innovation can be more converted into real productivity. Third, strengthen competition and cooperation with overseas enterprises and private enterprises. Integrate key value units in the industrial chain, attract high-quality resources to gather, and guide the healthy development of the market by formulating standard rules while deepening cooperation with various enterprises.

We will comprehensively improve the internal thinking and spiritual value of state-owned enterprise brands, upgrade the enterprise connotation and reshape the brand soul. In order to achieve high-quality "going out", state-owned enterprises should not only rely on product technology "going out", but also promote the enterprise's brand culture "going out". On the one hand, state-owned enterprises, especially central enterprises, as the vanguard of the industry, should take the initiative to serve the overall situation in the international operation, take the initiative to assume the mission responsibility of displaying a good national image, and show the real, three-dimensional and comprehensive image of China to the world through the market behavior and image publicity of enterprises. On the other hand, state-owned enterprises need different ideas, ways of thinking and management practices to build brands globally, such as accurate insight into user needs and full investment in innovation, refining and expressing brand beliefs and values, using good products and services to impress users emotionally, using internal assessment mechanisms that focus on brand rather than sales, paying attention to user experience and after-sales services, and paying attention to soft investment in corporate culture.

We will improve and improve the governance system and level of modern enterprises and enhance the ability of state-owned enterprises to operate globally. Establishing and improving the modern corporate governance system is a necessary condition for promoting state-owned enterprises to better "go out" in an increasingly complex international environment. First, coordinate the Party's leadership and corporate governance. On the basis of the leadership of the Party, we should constantly improve the corporate governance system, improve the efficiency of corporate management and enhance the competitiveness of enterprises. The second is to continuously optimize the decision-making mechanism of the Board of Directors. The board of directors is the core of modern corporate governance and plays an indispensable role. In order for state-owned enterprises to "go out" well and steadily, it is necessary to give full play to the scientific decision-making role of the board of directors in three aspects of economy, strategy and efficiency. Third, give full play to the role of professional managers. For state-owned enterprises to "go out", the effective implementation of enterprise strategic policies is the key. Professional managers are familiar with international trade business, local policies and management methods, and play an irreplaceable role in grasping operation, promoting transformation and strengthening management.