Agriculture is the biggest advantage of China's "going out"

The Australian government recently vetoed Chinese companies' plan to buy Australian cattle farms for A $350 million on the grounds that the deal was against the national interest after the New Zealand government rejected Shanghai Pengxin Group's application to buy local farms for US $56 million. Why are Chinese companies often blocked from "going out" by buying land locally? In what way should we enter the international market? In an exclusive interview with Mao Xuefeng, an associate professor at Renmin University of China, he analyzed the deviation of the "going out" strategy of Chinese enterprises, and pointed out that the unique agricultural model is the greatest strategic advantage of our country.

Why "go out"?

Mao Xuefeng believes that first of all, we should think about why we want to go out, why we should set up branches, and why we should acquire foreign enterprises. "if there is a lack of serious thinking, or if you go out under the temptation of policy encouragement and foreign markets, due to the lack of in-depth strategic thinking, little or insufficient assessment of local laws and regulations, market risks and political risks, the end result is often blind bidding and become a price-raising tool for investment banks or end in failure."

In order to "go out", enterprises should first meet their own needs of allocating resources in the world. For example, Bangji, a global agribusiness and food company, regards China as one of its important processing centers, South America as the production center and the United States as the R & D center.

Mao Xuefeng points out that the mindset of always worrying that we are "controlled" stems from our self-perception that we are "still very weak", but this perception is wrong. We should change our thinking, the enterprise's going out is to optimize the allocation of enterprise resources at the global level, rather than a simple resource control and control.

"in this process, one of the responsibilities of the government is to provide relevant trade information on overseas markets. At present, we have a great lack of information, which seriously restricts the progress of the development of overseas markets. We need to understand each other's stage of development, understand each other's needs, and achieve win-win development with them. Of course, we also need to know more about ourselves. With China's rapid economic growth and healthy agricultural development over the past 30 years or so, we must have done the right thing in many aspects, all of which require in-depth exploration to tell a good Chinese story on the basis of the 'three self-confidence'. " He added.

What is the shortcut of "going out"?

Mao Xuefeng believes that the single strategy of "going out" by leasing and buying land shows that there is a deviation in our business thinking. A more feasible way is to start with R & D support, from small enterprises, from a small part of equity, from the establishment of branches, to learn, adapt, be familiar with, and dig deep into foreign markets.

"Don't underestimate a small stake, it can play a big role at a critical time." Mao Xuefeng stressed that as long as a small amount of equity participation, there is a chance to enter the decision-making level of the company, will be able to generate their own voice and pricing power. Gradually grow up in the process of participating in the international market, learn advanced technology and management experience, build a global marketing network, enhance brand value, and naturally have market power in the world.

At the same time, entering and mastering the global trade network and logistics network also plays a decisive role in the formation of the right to speak in the international market. "Chinese enterprises with strength and good reputation should be encouraged to invest abroad, actively participate in warehousing, logistics, ports, agricultural products processing and other links, and constantly improve the level of agricultural cooperation." Mao Xuefeng suggested.

What do you mean, "go out"?

In the process of going out, what is the most valuable thing China can provide for the world? "the biggest advantage is China's agriculture." Mao Xuefeng said.

Although American agriculture is advanced, it does not meet the needs of emerging market countries. Most emerging market countries are in the stage of transforming traditional agriculture, and they just need the experience of science and technology, agricultural machinery, agricultural technology popularization and rural governance that China has just come out of this stage.

For example, most of the developing countries along the "Belt and Road Initiative" route are based on a small-scale peasant economy, and their current situation is similar to that of China in the 1980s and 1990s, and they are faced with the two major historical tasks of transforming traditional agriculture and moving from poverty to prosperity, both of which China can help.

In the task of transforming traditional agriculture, first of all, China has made great achievements in the development of agricultural technology in the past three decades, has realized the transformation of agriculture to high yield, high quality and high efficiency, and has accumulated rich management experience in agricultural technology extension. Secondly, China's agricultural machinery is more suitable for the family farming system of small farmers, such as "Dongfanghong" tractors are very popular in Vietnam and Africa. Third, these countries are faced with the problem of agricultural management system reform, and this experience is China's strength, not the United States' strength.

Mao Xuefeng believes that the above technology and management experience can be more easily absorbed and digested by agriculture in Africa and "Belt and Road Initiative" developing countries. Cooperation with China will help these countries realize the transformation of traditional agriculture.

In the task of moving from poverty to affluence, poverty alleviation practices in developing countries have fully shown that the only way to reduce hunger and poverty is to create more and better employment opportunities for the poor and to achieve sustained and beneficial growth. "China also has experience in this area. Over the past three decades, we have completed the economic and social transformation through the transfer of population from the agricultural sector to the industrial sector." Mao Xuefeng said.

Some labor-intensive manufacturing enterprises should be encouraged to go out and gradually transfer their existing equipment and production to the countries along the "Belt and Road Initiative" with relatively low wages by way of direct investment, so as to create a large number of employment opportunities and cash income in these areas, and at the same time realize their industrialization, modernization and rapid economic development.

"the government should also change its concept and really 'help enterprises' rather than 'support enterprises' and replace the current way of simple subsidies by providing public goods such as information and data. Promote these enterprises to help and guide less developed countries to improve their economic environment and management efficiency. " Mao Xuefeng said.