Agricultural outward investment must adapt to the new normal and accurately grasp development opportunities
In 2014, China's outward investment scale exceeded the scale of absorbed foreign investment for the first time, making it a net capital exporter. This means that since reform and opening up, the development pattern that mainly relied on exports and attracting investment has undergone a major transformation. Under this new normal, agricultural outward investment is facing a once-in-a-lifetime development opportunity, and we should proactively adapt to the new normal and earnestly plan the strategic choices for the period of the “13th Five-Year Plan”.
Agricultural outward investment needs to adapt to the new normal and accurately grasp development opportunities
At present, China has become the world's largest trading nation, the second-largest economy and the third-largest source of outward investment. As the economy enters the new normal and reform enters deep-water areas, the internal and external environment for agricultural outward investment is undergoing profound changes, with remarkable opportunities.
(1) China has entered a period of rapid expansion in the development of agricultural outward investment
According to statistics from the Ministry of Commerce, in 2014 China's net non-financial outward direct investment reached 102.9 billion US dollars, an increase of 14.1%. Between 2009 and 2013, China's cumulative agricultural outward direct investment reached 4.949 billion US dollars. Although it accounted for a relatively small share of the total and still lagged significantly behind manufacturing, services and other sectors, the average annual growth rate of flows over the five years reached 62.52%, far higher than the average growth rate of 14.3% for total flows over the same period, and it grew steadily year by year. According to another incomplete count, from 2010 to 2014 China's overseas mergers and acquisitions involving agriculture reached as high as 18.5 billion US dollars, represented by Shuanghui Group's 7.1 billion US dollar acquisition of 100% equity in Smithfield, showing blowout growth. It can be seen that through government leadership and capital market operations, agricultural outward investment has achieved dual improvements in quantity and quality. In addition, with the continuous deepening of domestic outward investment system reform, a series of favorable policy arrangements will certainly promote rapid development of agricultural outward investment.
(2) New global and regional cooperation mechanisms have built a broad stage for China's agricultural outward investment
The Party Central Committee and the State Council have proposed that only by taking into overall consideration and comprehensively using the international and domestic “two markets, two kinds of resources, and two sets of rules” can China's global economic interests be effectively realized. General Secretary Xi Jinping proposed the “Belt and Road” initiative and will contribute 40 billion US dollars to establish the Silk Road Fund to provide investment and financing support for infrastructure, resource development, and industrial and financial cooperation in countries along the routes; the Asian Infrastructure Investment Bank and the BRICS Bank, led by China, have been established one after another and are actually operating; bilateral free trade area agreements such as China-South Korea and China-Australia have basically been reached, and the high-standard China-US BIT is being accelerated; the China Overseas Agricultural Investment Fund will also officially begin operation. The successive introduction and operation of the above series of agriculture-related funds and new mechanisms and new architectures for regional and global economic cooperation have provided a clear favorable momentum for the strategic planning and implementation of actions for agricultural outward investment.
(3) Modern agricultural development has put forward urgent and long-term requirements for agricultural outward investment
The 2015 No. 1 Central Document pointed out that the double squeeze of the “floor” of domestic agricultural production costs and the “ceiling” of bulk agricultural product prices has already become severe. First, agricultural outward investment will help improve the completeness and connectivity of China's global agricultural industry chain, achieve joint improvement in industrial quality, development quality and operating efficiency, and ease cost pressure. Second, agricultural outward investment will help make better use of the favorable condition of sufficient international supply of agricultural products, increase the realistic possibilities and operational space for adjusting domestic shortages and surpluses, and ease price pressure. Third, agricultural outward investment needs to focus on the domestic self-sufficiency level of major agricultural products, production priorities, regional layout, and changes in agricultural product imports and exports and consumption structure, clarify key industries, key regions and main methods, and coordinate well with the domestic agricultural modernization drive to “adjust structure and transform mode”, creating favorable external conditions and forming strong external support.
Step up planning and clarify the strategic choices for agricultural outward investment during the “13th Five-Year Plan” period
Firmly grasping the historical opportunity of national development and basing itself on the new normal of economic development, agricultural outward investment should promptly plan a long-term layout, clarify strategic choices, and make positive contributions to pragmatically advancing China's agricultural foreign cooperation and actively expanding China's agricultural development space.
(1) Give priority to building the top-level design of the strategic planning for agricultural outward investment
Agricultural outward investment is an important component of the strategy for agricultural foreign cooperation. It is necessary to improve the ability to coordinate and utilize the international and domestic two markets and two kinds of resources, and around target needs, key content, actors, management mechanisms, policy support and other aspects, build a comprehensive agricultural foreign cooperation planning system composed of the national, provincial (regional, municipal) and enterprise levels. First, do a good job in combining the planning of agricultural outward investment with the agricultural development needs of target countries, and identify the points of connection based on the needs of both sides. Second, do a good job in combining the planning of outward investment goals of the central government, local governments and enterprises, rely on key industries to integrate the core interest demands of all parties in outward investment, and achieve coordination and consistency among the planning system, management system and enterprise actions. Third, do a good job in combining the planning of key technologies, key industries and target regions, and based on geographical advantages and cooperation convenience, adopt differentiated strategies to highlight the spatial layout of investment in neighboring Asia, countries along the “Belt and Road”, South America, Africa and other regions.
(2) Focus on cultivating institutional, industrial, enterprise and regional advantages for agricultural outward investment
First, deeply improve the reform of the management system for agricultural outward investment, and actively participate in the formulation of multilateral and bilateral agricultural investment agreements and rules, enhance China's voice in the formulation of international agricultural economic and trade rules and standards, and form a new institutional advantage for global agricultural cooperation. Second, promote the transformation of agricultural industry development from scale expansion to quality and efficiency improvement, and from cost advantage to comprehensive competitive advantage centered on talent, capital, technology, services and brands; vertically improve the competitiveness of a single industry's chain completeness, and horizontally promote the integration of industrial resources and build industrial alliances, forming a new industrial advantage. Third, accelerate the cultivation of internationally competitive agricultural enterprise groups, pay attention to attracting both agricultural and non-agricultural enterprises to participate together and give play to their respective advantages, and pay attention to building enterprise alliances and going abroad in groups, forming a new enterprise advantage. Fourth, build a network of agricultural outward investment partnerships based in the surrounding areas, radiating to the “Belt and Road”, and facing the world. With the help of capital market operations, international infrastructure investment and other opportunities, make China's agricultural foreign cooperation with relevant countries and regions closer, exchanges more convenient and interests more integrated, forming a new regional advantage.
(3) Relying on agricultural outward investment to progressively promote the effective transfer of “technology, industry and market”
As an important means of open economic development, the long-term goal of agricultural outward investment is to promote the realization of outward transfer at the three levels of technology, industry and market. First, on the basis of a reasonable assessment of the agricultural technologies suitable for China to export, export different types of agricultural technologies to different target regions and countries through outward investment, and promote the formation of dependence on relevant technologies. Second, on the basis of global integrated division of labor, realize the transformation from traditional “point-style investment” to “chain-style investment”, build a whole-industry-chain model covering production, storage and transportation, and processing, and to a certain extent achieve the effective absorption of domestic agricultural excess capacity. Third, combine with the supply, overall coordination and balance of agricultural products in target countries, target regions and the world, gradually establish stable agricultural product production and storage and transportation channels abroad, create new external markets, and improve the market competitiveness and international influence of China's agricultural outward investment.