——Based on the monitoring data of transnational operation performance of 100 enterprises in the city
In order to encourage the transnational operation of private enterprises in our city, in 2019, our city issued the Three Year Action Plan to Accelerate the Cultivation of Wenzhou Local Private Transnational Corporations (2019-2021), and determined 100 key monitoring and cultivation enterprises according to the transnational operation of the first batch of 137 inbound enterprises. In 2020, despite the impact of the COVID-19, the rise of trade protectionism in Europe and the United States, frequent investment reviews and other adverse circumstances of enterprises “going global”, the promotion of the cultivation of local private multinational companies in our city still achieved some results. The details are as follows:
1、 Cultivation of local private transnational corporations in our city in 2020
(1) The transnational operation focuses on the monitoring of the main body. In 2020, Wenzhou’s local private multinational corporation incubator will focus on monitoring 100 enterprises from 9 districts and counties. Compared with 2019, there will be 13 new enterprises, reaching 150. The threshold for entering the list of 100 key monitoring enterprises increased from 300 million yuan to 400 million yuan, and the average transnational index of 100 key monitoring enterprises was 13.6%. Among them, 5 Class A incubators were selected in 2020, an increase of 1 compared with 2019, and the average transnational index increased from 13.9% of the previous year to 19.7%; Five B cultivation enterprises were selected, one more than in 2019, but the average transnational index dropped from 13.6% of the previous year to 8.6%. 90 C-type enterprises were selected. Compared with 2019, the threshold revenue standard for warehousing increased from 300 million yuan to 400 million yuan, and the average transnational index increased from 1.9% of the previous year to 2.6%. In 2020, the average transnational index of Zhejiang’s top 50 local private enterprises in transnational operation will be 28.74%, of which the transnational index of our city’s shortlisted enterprises will be 28.85%.
(2) Industry distribution of transnational enterprises. The 100 enterprises monitored by the multinational corporation incubator are distributed in 33 industries, including manufacturing, wholesale, electrical machinery and equipment manufacturing, with 53076 overseas employees. Compared with the warehousing enterprises in the previous year, the industrial distribution diversity of warehousing enterprises will increase in 2020. The top five industries in terms of industry intensity are: 17 in manufacturing industry; 9 wholesale enterprises; 7 in automobile manufacturing industry; There are 6 enterprises in electrical machinery and equipment manufacturing, chemical raw materials and chemical products manufacturing, wholesale and retail, leather, fur, feather and its products, and shoe making respectively. The transnational index of the industry is calculated according to the transnational operation of 100 enterprises. The industries with high degree of transnational operation are other manufacturing industries, agricultural and sideline food processing industries, special equipment manufacturing industries and general equipment manufacturing industries. The transnational index is 36.89%, 25.50%, 24.51% and 13.61% respectively, exceeding the average transnational index of 100 enterprises.
(3) Benefits of transnational investment. In 2019, 100 enterprises’ overseas direct investment projects created 61.114 billion yuan of overseas assets, accounting for 5.65% of the total assets of enterprises; The accumulated overseas business income was 94.207 billion yuan, accounting for 17.95% of the total business income of the enterprise; In 2019, 100 enterprises paid a total of 1.586 billion yuan in taxes to the investment destination, and the total overseas profits of enterprises were 5.211 billion yuan; In 2019, the tax revenue contributed to our city totaled 16.023 billion yuan, driving imports of 4.783 billion yuan, accounting for 30.31% of our total imports in the same period; Exports increased by 9.301 billion, accounting for 21.43% of the city’s total exports in the same period. It has actively promoted the domestic and international “double cycle” development of our open economy.
2、 Analysis of existing problems
(1) The pyramid structure of transnational corporations has not yet been formed, and there is still a gap between them and the goals of the Action Plan. The scientific and stable cultivation team structure of local private transnational corporations should be a pyramid structure, which can be divided into three types: leading enterprises, stable enterprises and new and cutting-edge enterprises. However, the monitoring data on the cultivation of local private transnational corporations in Wenzhou in the past two years show that the pyramid structure of the local private transnational corporations has not yet been formed. At present, Class A (leading) cultivation enterprises have emerged, with clear cultivation objects and rich growth space, and are expected to continue to grow. However, the number of Class B (stable) cultivation enterprises is obviously insufficient. Compared with the cultivation objectives of the Action Plan document, there are three transnational corporations in category A (four are expected), only four in category B (10 are expected, 12 are expected), and more than 50 in category C.
(2) The scale and quality of transnational operations of enterprises still need to be improved. In 2020, the 100 key monitoring enterprises had 91 overseas investment enterprise projects, including 22 newly approved overseas investment projects from 2019 to 2020. After analysis, there are two bottlenecks in the transnational operation of local private enterprises in Wenzhou: first, the number of enterprises with transnational operations is relatively small. In 2020, there will be only 37 enterprises with overseas investment projects, accounting for 24.7% of the 150 enterprises entering the stock market. Second, the existing overseas investment projects are relatively small. Only 2 enterprises, including Qingshan Holding and Sima Garments, have accumulated overseas investment of more than 100 million dollars; There are 20 investment enterprises with accumulated investment less than 10 million US dollars, accounting for more than 60%. Third, the overseas high-quality projects involving R&D, brand and technology are insufficient. From the perspective of industry distribution, other manufacturing industries still dominate.
(3) The unstable international investment and operation environment affects the safety of overseas assets and investment confidence of enterprises. First, the current COVID-19 epidemic is still raging around the world, the mobility of domestic and foreign personnel is severely restricted, and the labor and logistics costs of overseas enterprises are generally increasing, which has brought varying degrees of impact on the normal production and operation of enterprises. Moreover, there is no turning point in the global epidemic trend, and the negative impact is likely to continue for a long time in the future. Second, the basic policies and public opinions adopted by the United States and its allies to restrict China’s development will not change. The restrictions on investment and trade in China will continue, and the political risks of investment and trade with other countries will increase. For example, in 2020, Australia’s strained diplomatic relations with China and the two-way restrictions on investment and trade will lead to a direct loss of nearly 20 million yuan for Zhejiang Zhuangbo Import and Export Co., Ltd., and its assets in Australia and subsequent investment will also be seriously affected, The investment confidence of enterprises in our city was hit.
3、 Suggestions on the cultivation of transnational corporations
(1) On the basis of local enterprises in Wenzhou, we will vigorously guide enterprises to join multinational companies to cultivate teams. For enterprises with a certain scale of operation, cultivating their international operation ability is an important part of Wenzhou’s work to cultivate local transnational corporations. First, implement relevant measures to cultivate and strengthen the main body of enterprises in our city, and expand the basic plate for the cultivation of transnational corporations; Second, according to the task deployment of the Action Plan, optimize the annual assessment of the task in each county (city, district), encourage each county to further tap the global business capabilities of local enterprises, and incorporate them into the city’s multinational company cultivation system.
(2) Guided by policy orientation, enterprises are encouraged to develop overseas investment projects with high quality. Through the cultivation platform of transnational corporations, actively publicize and interpret our city’s overseas investment policies to enterprises. Give full play to the role of business promotion funds at all levels, encourage enterprises to benchmark the international advanced level, break through the core technology, optimize the capital structure, accelerate and restructure, strengthen brand building, improve the international layout, and enhance the ability of global resource allocation. For the key foreign investment and cooperation projects of enterprises during the cultivation period, special support can be provided in the form of “one case, one discussion”. At the same time, do a good job in the evaluation of relevant policies.
(3) Take the optimization of services as the guarantee to guarantee the transnational operation of enterprises. Give play to the role of “going out” service alliance, provide policy consultation, financing information, investment countries, legal services, risk early warning and other services for enterprises’ overseas investment, carry out special consultation and evaluation for multinational companies, and provide suggestions and personalized support for global development. We will strengthen cooperation with local business associations and Wenzhou merchants, link overseas economic and trade cooperation zones, build overseas economic and trade liaison offices, and promote the transnational development of enterprises in the upstream and downstream of the industrial chain. We will explore the establishment of a new service mechanism for transnational corporations, and introduce policies to support enterprises listed in the key cultivation list in their overseas investment cooperation in terms of project filing, foreign exchange use, personnel entry and exit.
notes:
- Class A cultivation enterprises are enterprises with an annual revenue of more than 50 billion yuan; Category B cultivating enterprises are enterprises with an annual revenue of more than 10 billion yuan; Class C cultivation enterprises are enterprises with an annual revenue of more than 1 billion yuan.
2. Transnational index: use the calculation formula of transnational index defined by the United Nations, that is, transnational index=(overseas operating income ÷ total operating income+overseas assets ÷ total assets+overseas employees ÷ total employees) ÷ 3 × 100%。
(Contributed by Wenzhou Municipal Bureau of Commerce)