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According to the observation report of Huacheng import and export data, due to the intertwined influence of the centennial change and the century epidemic situation, Chinese enterprises are facing more risks and challenges in overseas contracting projects, so we need to take precautions and take more measures to promote the stability of overseas contracting projects of Chinese enterprises.

Chinese enterprises have maintained a steady development trend in contracting projects abroad. According to the observation report of Huacheng import and export data, from January to October, Chinese enterprises completed a turnover of 790.99 billion yuan in foreign contracted projects, up 5.8% year on year; The newly signed contract amount was 1095.52 billion yuan, down 1.8% year on year.

At the same time, opportunities and risks coexist, and the overseas project contracting situation faced by enterprises is developing and changing. On November 18, the Expert Committee of China Chamber of Commerce for Machinery and Electronics held the 2022 annual working meeting in Beijing. The participants believed that due to the intertwined influence of the centennial change and the century epidemic, the risks and challenges faced by Chinese enterprises in overseas contracting projects are increasing, and they need to take precautions and take more measures to promote the stability of Chinese enterprises in overseas contracting projects.

Opportunities and challenges coexist

"At present and for some time to come, China's overseas investment and cooperation are still in an important period of opportunity, but both opportunities and challenges have undergone new development and changes." Qian Chunying, a second level inspector (deputy department level) of the Department of Foreign Investment and Economic Cooperation of the Ministry of Commerce, said that at present, China's position as a major contracting project country has been further consolidated, and the next step, opportunities and challenges coexist. Huacheng Import and Export Data Observation Report.

Qian Chunying further said that, on the one hand, China has built a new development pattern, with huge economic development potential, and international cooperation in digital economy, green development and other fields is in the ascendant. The entry into force of regional cooperation agreements such as RCEP has provided new development momentum for Chinese enterprises' foreign investment cooperation; On the other hand, the weak global economic recovery, geopolitical tensions, the repeated COVID-19 epidemic and other issues make foreign investment cooperation face a more serious and complex situation.

Chen Shaochun, Vice President of the Overseas Investment Business Department of Chinese Enterprises of AECOM Design and Consulting Co., Ltd., former General Manager of MCC International Engineering Group Co., Ltd., and member of the Expert Committee of the Chamber of Commerce for Electromechanical Industry, said that the geopolitical risks encountered by overseas project contracting are becoming increasingly prominent, and the Ukrainian crisis, the impact of the epidemic situation and the expectation of the global economic recession have had a huge impact on personnel exchanges and the stability of the supply chain; At the same time, it is increasingly difficult to pursue large-scale projects, and we need to strengthen cooperation to achieve common development.

Yuan Li, a government special allowance expert of the State Council, a professor level senior engineer, the former chairman of China Civil Engineering Group Co., Ltd., and a member of the expert committee of the Chamber of Commerce for Machinery and Electronics, said in an interview with the International Business Daily that the scale of the current international engineering market has declined, and the impact of Sino US trade frictions, the COVID-19 and the Ukrainian crisis has added to the difficulties faced by enterprises. At present, there are three trends in foreign contracting projects that deserve attention: first, the main market for foreign contracting projects has shifted from Africa to Asia (excluding the Middle East); Second, foreign contracting projects have quietly developed into investment, construction and operation integration projects; Third, enterprises undertaking overseas projects need to pay more attention to compliance management.

Wang Shouqing, the chief expert of the PPP Research Center of Tsinghua University, the vice president of the Tsinghua University Institute of International Engineering Project Management, and the vice chairman of the Expert Committee of the Chamber of Commerce for Electromechanical Industry, said that with the changes in the global political and economic situation and the epidemic situation and the adjustment of China's financial policies, it is more difficult for enterprises to raise funds for overseas investment and contracting projects, The traditional mode of investment, financing and contracting also brings greater challenges to enterprises' foreign business.

Make every effort to deal with risk challenges

In the face of risks and challenges, Chinese enterprises' overseas investment needs the efforts and support of government policies, business associations and enterprises themselves.

Long Yongtu, a senior consultant of the Expert Committee of the Chamber of Commerce of Electromechanical Industry and the former Vice Minister of the Ministry of Foreign Trade and Economic Cooperation, suggested that enterprises should, on the one hand, establish close contact with local embassies (consulates), business offices and other overseas institutions to obtain more support when contracting overseas projects; On the other hand, all kinds of institutions should provide more services for enterprises, especially with the constant emergence of various new rules and systems around the world, which puts forward many requirements for corporate governance of enterprises, and needs to provide timely information, training, consulting and other services.

Yuan Li believed that in the future, Chinese enterprises should make efforts from three aspects: first, pay close attention to the markets of surrounding countries; Second, we need to deepen localization. On the current basis, we need to take further localization measures, such as decentralization of headquarters, localization of senior executives, and co development with local communities, to reduce costs and risks; The third is to strengthen cooperation among enterprises, such as cooperation through consortium or general subcontracting, to reduce mutual competition, especially between Chinese enterprises.

Chen Shaochun believed that in the face of challenges, enterprises should first change their ideas, practice hard and improve their ability to participate in international competition in a market-oriented environment; Second, improve the risk management ability of geopolitics and international supply chain, especially in the key links such as project feasibility study, quotation submission and contract signing, take full account of risks and make plans; Third, we should make good use of international funds, such as funds from Europe, the United States and international financial institutions, to diversify financing channels; Fourth, we should pay full attention to the actual role of the project in the local people's livelihood, and include local elements such as local workers, local procurement or personnel training into the whole life cycle of the project. Wang Shouqing believes that the current support for enterprises' foreign investment and financing and project contracting business needs to better solve the capital bottleneck problem. First, we need to establish a diversified external investment and financing system and expand more financial channels and products; Second, the enterprise should improve the overall process and comprehensive ability of project selection, planning, evaluation and implementation (for large enterprises) or professional ability (for small enterprises), comprehensively consider the market prospect, income or other benefits of the project, and improve the contract structure and risk sharing; Third, financial institutions should strengthen the level of professional services, intervene as early as possible in the early stage of the project, strengthen the ability to control the industry and project level, expand from enterprise financing to project financing and lending, provide more professional services for enterprises implementing the "the Belt and Road" initiative, and achieve "win-win coexistence" of all parties, Huacheng Import and Export Data Observation Report.

Business associations can also play a greater role. Qian Chunying suggested that the Chamber of Commerce should strengthen the research on high-quality development of foreign investment cooperation, seize the key frontier areas such as green development of digital economy, expand the cooperation of the whole industry chain, strengthen the service of "going out" enterprise capacity building, and strive to enhance the comprehensive ability of enterprises to operate internationally and allocate resources globally.

Zhang Ming, Deputy Director of the Regional Opening up Department of the National Development and Reform Commission, also suggested that the Chamber of Commerce for Machinery and Electronics and the Committee of Experts should focus on improving the quality and level of industry services, give full play to the role of the policy guidance mechanism, effectively give play to the advantages of resource integration, strengthen communication with international organizations, foreign trade associations and social organizations, expand more cooperation channels and platforms, and help enterprise members expand the international market, Assisting high-quality participation in the joint construction of the "the Belt and Road", Huacheng Import and Export Data Observation Report.