Why is the amount of foreign investment in the country's highest? -- Interpreting the second economic highlight of 2009

Core data
In 2008, our province approved a total of 61 overseas enterprises, and the actual investment of the Chinese side was 465 million US dollars, ranking fourth in the country.
In 2009, our province approved a total of 94 overseas enterprises, and the actual investment of the Chinese side is expected to reach 1.05 billion US dollars, ranking first in the country.
By the end of 2009, there were 16 overseas investment enterprises in our province with a contract investment of more than 10 million US dollars, and the cumulative contract investment of the Chinese side was 1.565 billion US dollars.
Hunan Daily reporter Cao Xian

Interviewees:
Liu Jie: Director of the Provincial Department of Commerce
Wang Jun: Deputy Secretary of the Party Leadership Group of Valin Group
Xiang Wenbo: President of Sany Heavy Industry
In 2009, a number of Hunan enterprises that successfully "went global" opened a new era of transnational operation of Hunan enterprises with the attitude of leaders for the first time.
Why did such a large-scale capital operation happen in 2009 under the influence of the global financial crisis? The reporter talked to Liu Jie, director of the Provincial Department of Commerce, Wang Jun, deputy secretary of the party group of Valin Group, and Xiang Wenbo, president of Sany Heavy Industry.

A series of large-scale support "* bits"

Reporter: Hunan is located in the inland and is not a province with strong capital, so why can the actual foreign investment in 2009 be the first in the country?
Liu Jie: From the annual statistics, it can be seen that cross-border mergers and acquisitions and overseas resource investment cooperation are the focus and highlights of our province's foreign investment. In 2009, enterprises in our province have "gone out" and actively used two markets and two resources at home and abroad. Sany Heavy Industry has invested 100 million euros in the construction of a R&D and manufacturing base in North Rhine-Westphalia, Germany, which is an industrial investment project in Europe*5655 in China so far. At the same time, the R&D and manufacturing base built by Sany in India with a cost of 60 million US dollars has been officially put into use, and the engineering design plan of Sany American Industrial Park has been approved and will start construction soon. Valin Group's acquisition of 17.34% of the equity of FMG in Australia has become an overseas investment project of *5655 in our province, providing a "Hunan sample" of cross-border mergers and acquisitions for many enterprises inside and outside the province. There are also Hunan Nonferrous Metals Subscription of Australian Aibo Co., Ltd., Xiangdian Wind Energy's acquisition project in the Netherlands, etc. This series of large-scale capital operations accounts for more than 80% of the province's actual foreign investment, supporting the province's "going out" blue sky.

The financial crisis provides a good time

Reporter: In 2009, when the global financial cold wave hit, enterprises in our province have accelerated the pace of overseas expansion, what is the reason?
Wang Jun: The global financial crisis has led to a sharp drop in the asset prices of many foreign companies, and this is a good time for us to invest. Resources are Valin's short legs. In 2008, we launched the resource development strategy to seek the initiative of market competition. In January 2009, FMG, Australia's third-largest iron ore producer, reported that its debt-to-asset ratio had reached 109%, and they urgently needed capital and market support. Valin saw the timing and officially launched the acquisition project, subscribing at a discount when FMG's share price fell to a low,* with a final stake of 17.34% and a total investment of $1,271.8 million. Compared with the previous market price of $2.83 per share for FMG, the total "cost per share" of Valin's stake and acquisition is about $2.38. The low-cost investment pays off handsomely. So far, Valin has achieved a floating profit of more than 10 billion yuan on the project.
Xiang Wenbo: Sany's investment in the German Industrial Park is a win-win result. Under the financial crisis, the European machinery manufacturing industry has been stagnant, equipment investment continues to decline, Sany investment projects in Germany, is expected to provide 1,000 jobs for the local area, the significance of boosting the local economy can not be underestimated. At the same time, North Rhine-Westphalia is the industrial center of Europe, with a large number of technicians, professional workers and a huge market, which can provide a good platform for Sany to localize its products, and the transportation cost will be significantly reduced compared to before. Sany's choice to build a plant in NRW was a strategic choice.
Liu Jie: The global financial crisis is a challenge, and it is an opportunity for enterprises in our province to go global. Under the financial crisis, the international market, international resources, and international division of labor are facing a reshuffle. Under the situation of turbulence and reshaping of the world economic pattern, Hunan enterprises have made great strides to go out and can occupy a new commanding heights of development. After the development in recent years, some enterprises in our province have a certain ability to invest abroad. At the favorable opportunity of low bargaining chips and low input costs, enterprises in our province can just improve the level of "going out" and realize the cross-border optimal combination of capital, resources and other production factors. In addition, in order to cope with the crisis and revitalize the economy, some countries have introduced policies and measures to attract foreign investment, which have eliminated some of the obstacles originally set for Chinese enterprises to enter the local market, and the road for enterprises in our province to "go global" has become smoother.

Based on advantages, the success rate is high

Reporter: Looking at the whole country, there are not many successful precedents for large enterprises to implement cross-border mergers and acquisitions and overseas investment, but in 2009, Hunan enterprises implemented overseas expansion, how to stand out in the same industry?
Xiang Wenbo: Overseas investment is different from the expansion method of other construction machinery enterprises. At present, the international operation capacity of Chinese enterprises is still lacking, and Sany has chosen a more prudent direct investment rather than mergers and acquisitions according to its own actual conditions and needs. The scale, progress, employment, business model and cost of direct investment are all within the control of the enterprise. On the basis of using its own superior resources, Sany takes Germany, the global manufacturing highland, as a resource integration platform, and uses international resources to serve its own internationalization strategy.
Wang Jun: It took us more than 20 days to complete the next round of negotiations, and it only took one hour for Li Xiaowei, chairman of Valin, to negotiate the price with FMG CEO Andrew. But behind this 1 hour, Valin has done a lot of work. For FMG, Valin has many advantages: FMG's development is based on Chinese demand, and it very much needs a Chinese steel company as a partner; Valin is the vice president unit of China Iron and Steel Association, and has strong coordination capabilities with the National Development and Reform Commission, the Iron and Steel Association, steel enterprises, large financial institutions and large railway construction and metallurgical construction companies, which is extremely important for the transformation and long-term development of FMG; Central South University has the world's first low-grade ore development and utilization technology and R&D capabilities, which is the technology required by FMG*...... This allows our team to be confident and decisive in the negotiation process.
　　
"Going out" but also "going up"

Reporter: How can the global layout of enterprises in our province go well and fast?
Wang Jun: Valin has basically structured the strategic layout of developing "high-quality products", a large number of high-tech and high value-added products, which have earned a lot of profits for Valin, and the company's exports have been in the forefront of domestic steel enterprises. The investment in FMG is only part of Valin's strategic deployment. In order to gain greater advantages in competition in the future, Valin will pay close attention to building a complete and highly competitive industrial chain and expand the space for survival and development in an all-round way. In terms of restructuring and mergers, Valin has selected two or three companies that are in line with Valin's long-term development strategy to conduct contacts and comprehensive investigations. We will continue to adhere to the standard of low cost and achieve integration effect.
Xiang Wenbo: The financial crisis has led to the adjustment of the global industrial structure. "Made in China" has long been at the end of the global industrial chain, and Chinese enterprises investing overseas is a challenge for themselves. The globalization of heavy chemical industries such as automobiles, machinery manufacturing, complete sets of equipment, and precision machinery is a new round of direction for China's industry. Only with independent core technology can enterprises go further and more steadily on the road of globalization.
Liu Jie: Hunan enterprises have made great strides to go out, marking that Hunan's opening up to the outside world has entered a new era of "bringing in" and "going out" from "bringing in" and "going out", indicating that our province's opening up has entered a new level, and the new industrialization has achieved fruitful results. Hunan strides out will drive the province's opening up and open economy to accelerate the development, and more "Made in Hunan" will go to the international market; At the same time, Hunan's popularity will be further enhanced, attracting more strategic investors to Hunan.
At present, the enthusiasm of Hunan enterprises to go out is very high, but they must go steadily and well in order to truly "go up". Our going global enterprises must do their homework: step up the introduction and training of experienced international management talents who understand foreign languages; Find out the situation of the investment object, be familiar with the relevant local laws and regulations, accurately identify and assess market risks, find ways to prevent and reduce risks, and know yourself and your opponent, so as to be invincible; Abide by the laws and regulations of our country or region, respect local customs and habits, operate in accordance with the law, abide by the contract, take the initiative to fulfill social responsibilities, and achieve harmony and mutual benefit with the local community.