Policy-based finance has become an indispensable component of the modern financial system. In China, policy-based finance carries significant historical missions and has accompanied the development of the country's economy and society in various stages. In the current context, the development of China's unique policy-based finance should adhere to the principles of Chinese Marxism and Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era. It should also take into account new tasks and circumstances facing China in building the new development paradigm, find a new positioning and make new adjustments, so as to make greater contributions to the building of a modern socialist country in all respects. For details, please refer to Overseas Investment & Export Credits, Issue 2, 2023, pages 3-6.
Owing to risk appetite, Chinese state-owned enterprises often invest in overseas power projects in the way of acquiring mature development rights. However, they frequently encounter the issue of premium on development rights due to the potential economic value of such rights. This paper focuses on the theoretical logic of the premium for the acquisition of development rights of overseas power projects and discusses the handling of the premium in terms of fiscal and taxation policy, valuation, adjustment mechanism and financing. It is suggested that the issue of premium for the acquisition of overseas power projects by SOEs be addressed from two perspectives, which are, matching the target market's premium acquisition capacity and consolidating the micro-foundation for premium transactions.For details, please refer to Overseas Investment & Export Credits, Issue 2, 2023, pages 7-11.
The development of new offshore trade is of great significance for stabilizing, improving, upgrading, and transforming China's foreign trade. However, its essential characteristic, which is the separation of orders, goods and capital flow, exacerbates the challenges in banks’ background checks on trading. The use of innovative back-to-back letter of credit settlement will allow banks to authenticate transactions and enhance settlement efficiency in the context of new offshore trade. In the future, banks can establish a risk control system for new offshore trade based on the "customer-product" dimension, innovate settlement products, implement dynamic anti-money laundering strategies, and promote electronic trade documents to facilitate the development of innovative offshore trade.For details, please refer to Overseas Investment & Export Credits, Issue 2, 2023, pages 12-15.
As an important part of China’s green finance, climate financing and investment pave the way for countries to achieve their low-carbon targets in pursuit of green development. China actively guides and facilitates investment in tackling climate change, but the funding gap remains large for carbon peaking and carbon neutrality. By analyzing the World Bank Group’s practice of green finance in comparison with that of China from the project and standard-setting perspective of climate financing and investment, the paper argues that China’s current climate financing and investment lacks unified standards and is short of market participation. Therefore, the World Bank Group’s experience should be leveraged to put in place globally applicable standards for climate financing and investment with innovated policies and diversified capital flow.For details, please refer to Overseas Investment & Export Credits, Issue 2, 2023, pages 16-19.
Endorsed by the EU in December 2022, the Carbon Border Adjustment Mechanism is closely linked to the EU carbon market and is considered a supplement to the EU emissions trading system. On the one hand, the mechanism contributes to the reduction of carbon emission; and on the other, it is open for EU to set up trade barriers through unilateral legislation. China should pay attention to the impact of the carbon border adjustment mechanism and related international rules, and take active measures to improve its domestic legal systems for carbon trading and other related mechanisms.For details, please refer to Overseas Investment & Export Credits, Issue 2, 2023, pages 20-23.
The Regional Comprehensive Economic Partnership (RCEP) is the first regional trade agreement signed by China that has a specified chapter on small and medium-sized enterprises. Regions covered by RCEP is increasingly important for China’s small and medium-sized enterprises to stabilize and expand their exports. Since the RCEP agreement entered into force, great opportunities have been brought to these enterprises’ exports with the general decline in tariff, the streamlined customs procedure, the implementation of cumulative rules of origin, and the promotion of e-commerce. At the same time, the high-level opening up of the region has posed challenges including the intensified industrial competition on the homogeneous market, the accelerated relocation of certain industries, as well as the surging market and correlated risks. Financial institutions in China should focus on features of and opportunities brought by the RCEP, innovate their financial products and services, and scale up their credit support, thus helping MSMEs seize the opportunities to expand their overseas markets and be more qualified to engage themselves in regional market competition.For details, please refer to Overseas Investment & Export Credits, Issue 2, 2023, pages 24-29.
Nowadays profound transformations are unfolding in the world and the Arabian region. Gulf states represented by Saudi Arabia have become an important pillar for jointly building the Belt and Road. Therefore, the strategic and overall significance of China and Saudi Arabia relationship is more prominent. The first China-Arab States Summit was successfully held in Riyadh at the end of 2022, bringing the cooperation between China and Saudi Arabia to a new height. Going forward, we should strive to consolidate the fundamentals of China-Saudi Arabia cooperation, expand new fields for cooperation and upgrade bilateral and regional relationship by producing more practical economic achievements, so as to contribute to the joint building the Belt and Road with high quality and the new development paradigm.For details, please refer to Overseas Investment & Export Credits, Issue 2, 2023, pages 30-33.
Since November 2021, China has established a comprehensive strategic partnership with ASEAN and promoted the signing of the Regional Comprehensive Economic Partnership, strongly boosting the development of trans-regional economy and trade. There is now an important task for AML work, which is how will China leverage its role as the main member of the Financial Action Task Force On Money Laundering to earnestly implement the China-ASEAN comprehensive strategic partnership in the field of AML. The paper elaborates on the current situation and characteristics of AML cooperation based on factors including China-ASEAN economic cooperation and trade as well as transnational money-laundering risks. It also analyzes the difficulties facing AML cooperation between China and ASEAN and provides targeted suggestions.For details, please refer to Overseas Investment & Export Credits, Issue 2, 2023, pages 34-37.
Third-party market cooperation has not only injected new impetus to the Belt and Road Initiative, but also served as a cooperation path for building an open world economy. In development assistance, both international tripartite and third-party market cooperation adopt open and inclusive approaches based on each party’s comparative advantages, and the latter one can learn from the former one’s theories and practices. By systematically summarizing the vision, motives and models of cooperation, this paper has discovered the key to successful tripartite cooperation and proposed possible approaches to strengthening third-party market cooperation, including establishing in-depth tripartite cooperation paradigm, clarifying each party’s roles, enhancing policy coordination, rule alignment and project evaluation through communication and feedback mechanisms, as well as forging development assistance synergy with green growth at the core.For details, please refer to Overseas Investment & Export Credits, Issue 2, 2023, pages 38-42.
There are several external factors behind the declining success rate of Chinese enterprises’ cross-border M&A, including political and investment relations between China and target countries, vulnerability of Chinese SOEs to political misunderstandings in commercial acquisitions, and overstretching of the concept of national security. Internal factors include limited M&A experience and the lack of professional talents. To improve success rate in cross-border M&A, China shall enhance mutual political trust with other countries and promote the signing of bilateral investment agreements, while enterprises shall improve the evaluation of M&A projects, and attach greater importance to the role of external professional advisors.For details, please refer to Overseas Investment & Export Credits, Issue 2, 2023, pages 43-48.