What obstacles do Chinese enterprises face in outbound agricultural investment, and how should they respond?
Since the state put forward the strategy of agriculture “going global”, Chinese enterprises have extensively carried out agricultural investment in Southeast Asia, Africa, Russia and other countries and regions, and have achieved considerable results. But on the whole, China's agriculture “going global” is still progressing relatively slowly, clearly lagging behind such industries as mining and construction, and also clearly lagging behind economically developed countries such as Japan and the United States. In order to study in depth the problems and obstacles facing Chinese enterprises in outbound agricultural investment, in 2013 the author conducted a case study of the outbound agricultural investment of 36 enterprises in 4 provinces and autonomous regions, namely Shandong, Zhejiang, Guangxi and Heilongjiang, and put forward countermeasures and suggestions for promoting enterprises' outbound agricultural investment.
The main problems and obstacles facing enterprises in outbound agricultural investment
(1) Constraints of the enterprises themselves
1. Some enterprises have relatively weak capacity to resist risks. As reflected in the survey, agricultural project development costs are relatively high, the payback period is long, and they face risks from climate, market, international political changes and other aspects, so some enterprises have relatively weak capacity to resist risks.
2. Enterprises lack personnel suitable for internationalized operations. The more prominent problems at present are: (1) a lack of high-end talent with internationalized management capabilities; (2) a lack of agricultural technical talent willing to work abroad; (3) a lack of talent in less commonly taught languages.
3. They face fierce competition from enterprises of developed countries. Enterprises from countries and regions such as the United States, Japan and South Korea are generally larger in scale and have stronger risk resistance, creating greater competitive pressure on Chinese enterprises' outbound agricultural investment.
(2) Obstacles in domestic policy
1. Investment project approval procedures are complex, involve many stages and take a long time. According to the surveyed enterprises, approval of outbound agricultural investment projects is complex, the approval time is relatively long, and it consumes considerable energy, affecting project implementation and easily causing the loss of market opportunities.
2. The use of domestic seeds abroad is restricted by national seed export management. According to some surveyed enterprises, Southeast Asian countries such as Cambodia and the Russian Far East lack high-quality rice seeds, but because most of China's advanced and commonly used seeds are not included in the “available for external exchange” catalogue and therefore cannot be exported, this has affected the economic benefits of Chinese enterprises' outbound investment in crop farming projects.
3. The shipment back of agricultural products such as grain and cotton is restricted by import tariff quota management. According to the survey, most enterprises engaged in grain and cotton cultivation abroad find it difficult to obtain import quotas. According to some surveyed enterprises, in order to ship grain and cotton produced by their overseas investment back to China for sale and processing, they often seek out relevant enterprises to buy grain and cotton import quotas.
4. Bringing products back to China is restricted by animal and plant inspection and quarantine management. For example, because China has not signed bilateral quarantine agreements with some countries at present, rice produced by Chinese enterprises' investment in Russia cannot be shipped back to China for sale through normal channels.
(3) Constraints of the domestic support service system
1. Investment information services are inadequate. As reflected in the survey, few enterprises obtain outbound agricultural investment information from the government system, and many enterprises give up outbound agricultural investment because it is difficult to collect enough information.
2. It is difficult for enterprises to obtain loans for outbound agricultural investment projects. As reflected in the survey, the scale of state policy-based loans is too small, and they are mainly concentrated in a small number of large enterprises, making it difficult to solve the loan difficulties of most enterprises' outbound agricultural investment projects.