Undercurrents of risks Making the right decisions 6 Riding the Silk Road China

Undercurrents of risks making the right decisions 6

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Undercurrents of risks – Making the right decisions 6 Riding the Silk Road: China sees outbound investment boom Outlook for China’s outward foreign direct investment, March 2015
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19 “EY Overseas Investment Growth Navigator” helps Chinese companies mitigate risks and challenges on their outbound investment journey and become global market leaders. EY Overseas Investment Growth Navigator Take precautions Multi- leveraging Expand channels Sound planning Introspection Assume social responsibilities Attract talents Recruit global talents with overseas experience for cultural integration. Promote effective communication and post deal integration. Build consistent and high performancing teams. Ensure compliance with the laws and regulations of the host country. Respect local culture practices. Assume corporate social responsibilities, e.g., create local employment opportunities and support education, environmental protection and other public welfare activities. Exercise corporate advocacy and build a good corporate image. Improve corporate governance structure and establish an institutional system in line with international markets and financial condition for reasonable decision-making. Strengthen overseas investment management and localize operational team. Establish and improve the risk prevention and management mechanism. Understand the risks of overseas investment and operation. Execute due diligence and risk assessment. Develop risk identification and management mechanism, and improve crisis management. Leverage intermediary and strategic alliances, and professional firms with overseas experience. Reduce information asymmetry and enhance decision-making capability. Seek opportunities for joint ventures and strategic alliances in order to enhance strength and reduce risk. Develop financing strategies and expand the financing channels. Improve financial planning and management, and develop diversified funding sources. Reduce financing costs by using domestic and foreign capital markets. Develop an international investment strategy. Establish clear strategic plans and goals. Determine the globalization strategy according to conditions of the company to achieve the optimal allocation of global resources. Enhance the company's position in the global industrial chain. Corporate culture Social responsibility Corporate governance International strategy Financing planning Strategic cooperation Risk prevention Riding the Silk Road: China sees outbound investment boom Outlook for China’s outward foreign direct investment, March 2015
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20 A new wave of internationalization will be unveiled and China’s outward FDI will reshape the global economic landscape. Over the next five years, China’s outward FDI will grow more than 10% 21 and continue to surpass the amount of foreign investment into China, and China will become a capital-exporting country.
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