REVERSE INVESTMENT: OUTBOUND INVESTMENT FROM CHINA INTO OTHER COUNTRIES & REGIONS

Movement from China to set up assembly centers, joint-venture manufacturing and processing plants, or distribution warehousing in other countries and regions Through a decade of efforts promoting the concept of “outbound investment” from China into the developed countries of U.S., Europe, and Australia, and other developing countries such as the Middle East, Africa, South and Central America, etc., Future Trends International (Group) Corporation has been responsible for devising the theoretical framework which has led to a major policy adoption by China’s Central Government to spearhead a movement for "reverse investment", primarily in manufacturing investment, from China to other countries. Such a “reverse investment” program is becoming a promising fashionable trend for certain stronger Chinese manufacturers to set up processing or assembling plants, or distribution warehousing, in other countries for a number of reasons such as closer market access, sales of parts from China to the joint-venture assembling plants, acquiring technologies, utilization of international capital for the further processing of Chinese parts & materials abroad, etc. After years of devising and promoting the concept, in January of 1999, the President of Future Trends, Mr. Farzam Kamalabadi, completed a 6 page analysis report in Chinese on the subject which has been taken as an "internal circulation" report by relevant Chinese government departments. At the same time, The Shanghai Business News covered a full page front cover article entitled “U.S. China Joint Venture, in U.S.”, based on the report written by the President of Future Trends. After a heated debated among certain top government circles, within a short time there was an overwhelmingly positive response. Since then, a dozen of national & regional news media have published or broadcast the full text of the report, or have relayed the concept of the report with various editorial comments. This has started a process to generate new policies in China to encourage manufacturing investment abroad, on a systematic manner as an alternative form of market opening for China (this will be a shift of policy in China for capital outflow, which had been formerly discouraged, to be now directed to the developed and the developing countries). This process which only has recently 2started, has the promise to gather momentum, and to reach a peak within a few years following China’s entry to the World Trade Organization (WTO). Future Trends has not only created this concept in China for “Reverse Investment”, or “China Outbound Investment”, but is also spearheading the promotions of the concept throughout China with the media and among the highest circles of the provincial and central Government departments. In China, for the individual mainland Chinese enterprises and businesses to make decision to invest overseas in the US, they need the approval & support of the MOFTEC (Ministry of Foreign Economic Relations & Trade), for taking the funds out, as capital outflow is heavily regulated and monitored in China. For strategic reasons, Future Trends first started a process to create the right atmosphere of support among top policy makers; and also to create an atmosphere of competition among the manufacturers, while dispelling their doubts and worries as to the success and the risk of such a move, via providing the reasoning for the economic benefits of such a "reverse investment" and explaining the methodology, using the Chinese business media widely and extensively. The concerted efforts by Future Trends to create a wave to push China outbound investment by influencing the general thought of the policy makers and the business community was quickly crystallized into policy making as seen below. This development is the direct result of the theoretical policy suggestion "internal circulation report" of the President of Future Trends, Mr. Farzam Kamalabadi. Mr. Sun Wei Yan, president of MOFTEC's University mentioned in the China Daily article, is an associate of the President of Future Trends, and also has received an early copy of the Chinese reports presented by Future Trends representative at a major economic conference in Zhuhai, China, on December 6th, 1998. He also met with Mr. Kamalabadi in Beijing on December 9th, 1998, just when the report was newly prepared. Also, the full page report on China outbound investment by Mr. Kamalabadi was printed on February 4th, 1999 in the front page of International Business Daily's Transnational Operation Herald, which is the official Newspaper of the MOFTEC. The full text of the same report was immediately printed in a dozen of influential economic news dailies and magazines in Beijing, Shanghai, and throughout China, with the number now exceeding over 100 press converges, while Future Trends was recognized and cited as the originator of this innovative concept. 3The timing is quite ripe for the countries and regional governments who have investment attraction programs or interested to develop such an agenda to reap the benefits. Future Trends is offering to co-operate with such active and outgoing regional governments which have special investment attraction policies (with an attractive investment environment and an aggressive related policies), to direct the interest generated in China to be materialized into concrete assembly or processing centers, investment projects, or major distribution warehousing projects in the targeted regions.