The Era Of Net Capital Outflow: Enterprises' Outward Investment Is A Normal Investment.

Internationalization of Chinese enterprises is a direction for the future. Internationalization means mergers and acquisitions in the international market, which means the flow of capital. However, how to define capital flight under the devaluation of the people is a major problem, which requires us to pay close attention to it.

In June 22nd, the market suddenly changed, and the stock market of the Wanda series of bonds dropped sharply. Then, the stock market of the Fosun series also appeared in an uproar. According to the first financial daily, more than 15 bonds amounted to 01, 16 Wanda, 01, and so on, and the number of bonds had dropped sharply. Over 10 bond pactions had soared to more than 7% in one fell swoop, and the trading volume of individual bonds increased by a hundred times. In 2024, the US dollar bond fell to 1.9% in 2024, and the US dollar debt fell to 2% in 2022.

The big fluctuations in the market led to an old news fermented and endowed with some political implications from some media. In June, the CBRC asked banks to investigate the credit and risk analysis of several enterprises, including Wanda, Hainan Airlines, Fosun and Rosen Neri Zhejiang.

In the near future, the supervision department will arrange the on-site inspection of the enterprises, both of which are for the sake of finding out and checking the possible risks, but not making risk judgments.

The rise of a country needs to prove its strength to the world, and the rise of an international enterprise is also required by internationalization rather than isolation. In that case, it can only be self determined and passive everywhere. From the global perspective, the rise of every multinational enterprise has invested all over the world in factories, and it has made acquisitions around the world, making money from all over the world. Recently, it has acquired a real estate loan company in Italy. Recently, Chinese enterprises are faced with an urgent need to go out. The domestic market demand is limited, and the excess capacity can not be digested. At the same time, the capital is seriously overloaded, and the domestic can not find more and better investment targets.

It is more difficult for the real economy to take place. The way around is set up under such a background. The Chinese enterprises going out to earn the world's money is an irresistible trend.

But going out of business also means that the outflow of China's foreign exchange means the loss of capital and the reduction of foreign reserves. This will not cause great concern in the era of net capital flow. But in the era of net capital outflow, the RMB depreciation cycle and capital outflow will attract much attention from the market, which will arouse great concern of management. In view of the abnormal overseas M & A of Chinese enterprises, Pan Gongsheng, vice president of the central bank and director of the State Administration of foreign exchange, attended the annual meeting of China Development Summit 2017.

To put it frankly, overseas mergers and acquisitions of enterprises are also a matter of mud and sand. It is not ruled out that some enterprises are purely in order to avoid the risk of RMB devaluation, but from the perspective of rational economic man, this is beyond reproach. It is a kind of diversification of investment and is consistent with the idea that all eggs should not be put in the same basket.

This leads to a problem: enterprises going out to invest is a normal investment, it is a kind of normal investment to expand themselves, a pursuit of expanding their own business, a pursuit of an overseas expansion of enterprises, or a pure going out to avoid losses in Renminbi depreciation. It is difficult to distinguish from the outsiders by relying on overseas investment to pfer the risk of asset pfer. After all, there is no clear distinction between the two, but there is a certain inherent tolerance. Going out to avoid the risk of devaluation of the RMB and make it better to realize its maximum interests, and to avoid the risk of RMB depreciation purely by relying on foreign investment is a great risk.

At present, management is most concerned about asset mergers and acquisitions. In February 16, the director of the four Department of the development and Reform Commission, the Ministry of Commerce, the people's Bank of China and the foreign exchange bureau responded to reporters' questions 6 days ago, saying that the regulatory authorities paid close attention to some irrational foreign investment trends in the real estate, hotels, cinemas, entertainment and sports clubs in recent years, as well as the hidden risks of foreign investment, such as large non principal industry investment, limited partnership enterprises' foreign investment, "mother child" and "quick setting out".

From a global perspective, Hongkong entertainment and film and television industry has been invincible in the world market. Japan has also been buying large amounts of real estate and entertainment in the United States. The football industry has led to the constant pursuit of world capital predators. Not many countries have made restrictions and no capital flight charges. They are only seen as a normal overseas investment, but only in China.

This is not reasonable. As an enterprise, especially for private enterprises, profits and losses are all their own money, and they will not make fun of their money from the moral sense. Therefore, investment should be considered carefully, and it is in line with the interests of enterprises to maximize, but it is in line with the country's financial interests. Perhaps few entrepreneurs will consider such consequences. Therefore, it is not inappropriate to be supervised under the name of capital flight and from the national level. After all, it is necessary to maintain the stability of the RMB exchange rate and maintain capital.

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There are different interests in different positions, so it is difficult to distinguish the advantages and disadvantages of overseas investment. However, we still need to clarify the boundary between pure capital flight and normal foreign investment, prevent dislocation of supervision, prevent market misreading, and lead to market volatility. This requires us to set up some negative list of investment projects. We need to set up some basic investment standards, including scale and industry access, and make some restrictions on cross-border mergers and acquisitions, which may reduce investment efficiency. But eliminating some suspicion in the market may also be an effective way at present. After all, every policy will have advantages and disadvantages, and it is impossible for all parties to be satisfied.

Secondly, the author has always opposed the politicization of economic phenomena.

It is also the politicization of financial problems. In China, once private enterprises have political risks, they mean business risks and even the loss of core figures. This is also one of the reasons for Wanda's prosecution of the media. Private enterprises going out is a normal investment. A normal risk release is not equal to money laundering. Therefore, the law is not illegal, so it can only be an investment norm, and can only act as a warning risk, not suitable to whip up, or even impose legal sanctions.

Three, the Chinese media, especially the media professionals, are different in quality and have different professional abilities. The party's interpretation or even deliberate misreading leads to the policy's willingness to be completely distorted. In fact, it is a normal risk investigation for the CBRC policy, but it is unacceptable for some people to interpret it as a political risk event. It is a legitimate act for the state to regulate overseas high risk assets acquisitions from the perspective of macro financial security. We need not interpret it too much. Therefore, we need to interpret the rules of the marriage system in the light of the media policy and prevent the good from being distorted.

There is no denying that China has serious overcapacity. China has been pushing the internationalization of enterprises to go global. The whole area is the internationalized executor. Overseas mergers and acquisitions will still be more active in the future. It is still a direction for enterprises to have enough confidence to expand overseas.

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