English

By Xie Fang

Spurred by the progress of the Belt and Road initiative, a growing number of Chinese enterprises have become increasingly enthusiastic about setting up overseas development areas in recent years, the 21st Century Business Herald reported on Wednesday.

Data released during the 2nd China Overseas Development Area Summit (CODAS) held in Tianjin recently shows that by the end of 2017, Chinese enterprises have invested roughly $30.7 billion in 44 countries to established 99 overseas development areas with the total area hitting 956 square kilometers.

What's more, as many as 4,363 companies have moved into these areas, generating $2.42 billion in income tax and creating 258,000 jobs for host countries.

Seventy-five out of the 99 overseas development areas are located in 24 countries covered by the Belt and Road Initiative, with the total investment reaching $25.45 billion. With the entry of 3,879 enterprises, these areas have generated $1.68 billion in income tax and created 219,000 jobs for host countries.

Xian Guoming, director of the Research Center on Multinational Corporations of Nankai University, noted that most of the countries where Chinese enterprises have established overseas development areas are developing countries which keep close economic and trade relations with China.

"Since these countries welcome Chinese investments, there is no political risk facing Chinese enterprises," said Xian, adding that Chinese enterprises can draw on the cheap labor force and rich natural resources of these nations.

However, there are still some thorny issues like poor profitability and slow investment return for Chinese enterprises to tackle when running these overseas development areas. Xian suggested that Chinese enterprises should actively cooperate with local governments to pursue a more inclusive development of such areas.