Industrial parks facilitate globalization of Chinese companies

GUANGZHOU - Chiye, a Chinese glass manufacturer, has long hoped to build an overseas factory to expand output. But the executives have been hesitant about where to go.

"We worried about a number of things that are important to glass makers, such as traffic and infrastructure," said Liu Wenjie, chairman of the company based in Hebei Province.

Progress was made earlier this year after an intermediary helped the company find a position in an industrial park in Malaysia. Chiye intends to move in.

Attractions of the Kulim industrial park include that it offers natural gas at half the price in China and that it has stable supplies of water and electricity and good security services, Liu said. "If we set up a plant ourselves, there would be many uncertainties."

Overseas industrial parks, many backed by the government of the host country, have attracted Chinese manufacturers aimed at going global, with quality infrastructure and services, as well as preferential policies in financing and taxation, said He Zhenwei, secretary-general of China Overseas Development Association.

"For Chinese companies, the parks reduce the risks and costs of operating abroad. For the host country, the parks create jobs, expand exports, and help with industrialization," He said at a forum on globalization of Chinese companies held earlier this month in Guangdong Province.

An industrial park in Egypt has attracted more than 70 companies that have invested a total of $1 billion and created 3,300 jobs during the past nine years, according to TEDA, a Chinese builder.

An additional zone in the park, covering 6 square km, is ready to open. It is expected to attract investment of $2 billion and create 40,000 jobs, said Wei Jianqing with TEDA.

A China-Belarus industrial park in Minsk has attracted 28 companies from China, Belarus, the United States, and European countries since it opened last year. The park, welcoming high-end industries such as big data and e-commerce, offers generous tax discounts.

"For example, companies are exempted from a corporate income tax for 10 years starting from the day when they make a profit," said Zhan Wang with China CAMC Engineering Co., Ltd. that built the park.

By the end of 2017, Chinese companies built 99 industrial parks in 44 countries and regions. Among them, 75 parks are in 24 countries along the Belt and Road, attracting 3,879 enterprises with total investments of over $25 billion and creating 219,000 jobs, according to China's commerce ministry.

Overseas industrial parks are a path to realize the Belt and Road Initiative and a platform to boost international industrial operation, according to Ren Hao, head of Tongji University Development Institute.

Intermediaries have emerged to match the parks and companies.

UTOU, an online intermediary based in Guangdong Province, has 6,000 registered members, including governmental organs, embassies, industrial parks, and investment organizations.

"We have noticed that foreign embassies are increasingly interested in advertising the parks through our website," said Xiang Jing with UTOU.