Ｏｖｅｒｓｅａｓ Ｃｈｉｅｓｅ Ｅｎｔｒｅｐｒｅｎｅｕｒｓ：Ｓｅｃｏｎｄ Ｆｏｒｃｅ ｏｆ Ｃｈｉｎｅｓｅ Ｅｃｏｎｏｍｙ

Most of the foreign-funded enterprises in China are in fact funded byoverseas Chinese， They have made indelible contributions to China'sremarkable economic achieve ment， Their pioneering spirit has already been written into the glorious annals of China's economic development!

In the past 27 years since the reformand opening-up were carried out， especially in recent 20 years or so， dramatic changes have taken place in China， and parti cularly the Chinese economy has made historic break through repeatedly. To these the over seas Chinese entrepreneurs made indispensable and im-portant contributions. Zhang Heping， Di-rector General of Taiwan， Hongkong and Macao Affairs Department of the People'sDaily (Overseas Edition) gave his atten-tions to the issue of overseas Chinese for along term. He remembered clearly the re-mark of the former Chinese Premier ZhuRongji at the Sixth World Chinese Entre-preneurs Convention on September 19，2001， which is the first session held in Chinese mainl and and on the largest scaleup to now. Premier Zhu said with deep feel-ings， \"Over the years， most of the foreign-funded enterprises in China are in fact funded by overseas Chinese. They havemade indelible contributions to China's re-markable economic achievement.\" \"Your pioneering spirit has already been writteninto the glorious annals of China's eco-nomic development!\"World Chinese Entrepreneurs Weekly Emerging as the Times Demand

\"However， so far there is no any inde-pendent economic new spaper specializingin the study of over seas Chinese，\" said Ms Zhang Ping， Director General of the Ser-vice Center for Overseas Chinese entrepre-neurs of Chinese Market Academy. She said that whether for overseas Chinese en-trepreneurs to invest， or for Chinese gov-ernments at different levels to attract for-eign funds， a special newspaper is in ur-gent need. To serve overseas Chinese en-trepreneurs better and benefit the wholecountry， we originated World Chinese En-trepreneurs Weekly.

On May 24， China Nationality Daily -World Chinese Entrepreneurs Weekly wasoriginated， which is the sole economicnewspaper serving overseas Chinese en-trepreneurs up to now. Disclosed by Ms.Zhang Ping， who also holds the post ofeditor-in-chief of the Weekly， that there areover 87 million overseas Chinese in 168countries and regions around world， andthey possess funds valued at more thanUS$2 trillion， or about RMB17 trillion，RMB3 trillion more than China's GDP in2004. Governments of various countries inthe world looked at their capabilities in in-vestment with new eyes， and their invest-ments have played a role of mainstay inmany countries. \"Overseas Chinese entre-preneurs are a powerful force in globalbusiness circles， which cannot be ignored.\"

\"The emerge of a special medium dem-onstrated not only the huge business op-portunities in a particular industry， but alsoits demands for vigorous development，\"assumed by Li Xiguang， Director-Generalof the Center for International Communi-cations Studies of Tsinghua University，\"this predicated that in view of the influ-ence of overseas Chinese Entrepreneurs onChina's domestic economy， it is impera-tive to establish a medium to give reportto.\"

It is known that Overseas Chinese Re-search Center of Chinese Academy of So-cial Sciences started to publish the Year-book of World Chinese Entrepreneurs since1994. Liang Dongsheng， the formerDeputy Director of the Editorial Board ofthe Yearbook and present publisher， re-called that since 1994， China has been thelargest developing country attracting themost overseas investments in the past 10consecutive years. It was the publishingcompany's attention to the important roleand influence Chinese entrepreneurs hadplayed in Chinese economy that helped toinitiate the Yearbook， a platform for eco-nomic insiders both at home and abroad tocommunicate in the regard.

\"However， editing and publishinga Yearbook lasted a long term， far fromcovering the activities of overseas Chi-nese entrepreneurs in an all aroundway and in time， and can not meetreaders' demands for exchanging of in-formation. This urgently needs a newspa-per to meet the needs of the times put for-ward by the economic development ofoverseas Chinese enterpreneurs\"， inter-preted Zhang Ping， member of the Edito-rial Board of the Yearbook.

Wang Jinzhen， Deputy Secretary-Gen-eral of China Council for the Promotion ofInternational Trade， disclosed at China In-ternational Investment and Financing Fo-rum held inXI'ANCity on April 7， from1978 to the end of February 2005， Chinesegovernment approved the establishment of510，000 foreign-invested enterprises， withUSS 1.1 trillion contractual foreign invest-ment and US$570 billion actually utilizedforeign investment.

According to the statistics， since 1994China has been the second largest countryabsorbing foreign direct investment (FDI)for many years next only to the UnitedStates. In 2003， China surpassed the UnitedStates as the largest foreign capital absorb-ing country around the world， and the firstplace for transnational corporations to in-vest into. In 2004， Chinese actually utilizedforeign capital amounted to US$60.6 bil-lion.

It is worthwhile paying attention to thesituation， that is， the capital invested byoverseas Chinese entrepreneurs accountedfor more than 60% of total Chinese acm-ally utilized foreign capital. If we assumedomestic investors as the first force to sup-port Chinese economy， due to overseasChinese entrepreneurs have affirmativelybeen the second force， even if merely interms of investment.

Moreover， this force is influencing thefurther development of Chinese economyin larger areas and to deeper extent witheach passing day.

Mr. Li Ka-shing， a famous Hong Kongentrepreneur and known as the richest over-seas Chinese around the world， and his sonRichard Li Tzar-kai， invested in a largescale into real estate of Chinese mainlandin quick succession in 2005. These wereunprecedented actions.

Chinese central government promul-gated recently a series of policies to regu-late and control the market of real estate，but this did not weaken Mr. Li Ka-shing'senthusiasm for entering into the real estateindustry in Chinese mainland. At the sign-ing ceremony of Hong Kong Businessweek on June 3， Xu Jiandong， DeputyManaging Director of a real estate invest-ment company of Hong Kong HutchisonWhampoa， officially signed an agreementwith leaders of Wangcheng County， HunanProvince with total investment of US$50million， indicating that HutchisonWhampoa officially embarked on invest-ment in Hunan Province.

On May 25， Li Ka-shing's two lead-ing listed companies， Cheung Kong(0001.HK) and Hutchison Whampoa(0013.HK) jointly promulgated an an-nouncement， declaring that two land de-velopment projects have been concludedin Tianjin and Beijing， which Li Ka-shingwould invested capital of aboutUs$200 million into.

On May 21， theGovernment spokesper-son of Hainan Provincedisclosed at the Press Releases that Li Ka-shing， Chairman of Hutchison WhampoaLimited and \"Little Superman\" Richard LiTzar-kai， President of PCCW-HKT Lim-ited would unite for the first time to de-velop Haitang Bay， one of the five famousbays in Sanya， Hainan Province， for theconstruction of top-grade hotels.

In addition， Richard Li Tzar-kai is ac-tively seeking cooporation with ChinaNetwork Communications Corporation(CNC) to develop the land of 17 millionsquare meters possessed by the latter. OnMarch 25， he made a special visit toZhengzhou City， capital of Henan Prov-ince. After a whole-day study he expressedhis excitement about the advanced city lay-out and his desire for investing inZhengzhou's housing industry.

In early May， the leader of ShaanxiFood and Medicince Administration intro-duced at the Trade Talks of Western Re-gion that other than investment in real es-tate industry， Hutchison Whampoa pre-pared projects of RMB 1 billion for RD，production and marketing of Chinese tra-ditional medicines and medical instrumentsin western regions. In the same month，Guangzhou Baiyunshan Chinese MedicineFactory and Hutchison Whampoa co-in-vested RMB345 million to set upGuangzhou Baiyunshan - HutchisonWhampoa Chinese Medicine Co.， Ltd. Infact， both sides started to produce healthcare drink in the name of Baiyunshan -Hutchison Whampoa since last Spring Fes-tival.

Up to now，Hong Kong in-vestors with Mr.Li Ka-shing as arepresentativefigure are still the leading source of invest-ment in Chinese mainland， which showeda momentum of acceleration in recentyears. In 2003， the number of Hong Kongdirectly invested projects in Chinese main-land reached 13，633， with US$40.71 bil-lion contractual Hong Kong investment，25.7% and 61.5% up respectively year-on-year. Up to the end of 2003， Chinese main-land attracted Hong Kong investment ofUS$223.1 billion as a whole， accountingfor 44.5% of the total foreign investmentin Chinese mainland; actually utilizedHong Kong， Macao and Taiwan investmentreached US$264.252 billion， accountingfor 52.7% of total foreign investment ac-tually utilized in Chinese mainland; con-tractual investment value US$496.63 bil-lion， 52.7% of the total value in China.

According to analysis in terms of re-gions， the projects invested by overseasChinese entrepreneurs in Tianjin has ac-counted for 52.74% of those invested byall foreign investors， and contractual invest-ment value accounted for 48.66% of thetotal foreign contractual investment valuesince 2004. In Hainan Province， the cur-rent number of registered foreign investedenterprises is up to more than 7，000， amongwhich overseas Chinese invested enter-prises accounted for 80%， being the lead-ing source of foreign investment in Hainan.Anhui provincial governmentaccumulatively approved over 560 foreign-funded enterprises， with US$7.3 billionactually utilized investment value， of whichoverseas Chinese funded enterprises ac-counted for 70% more， and total invest-ment value accounted for 60 percent. InShijiazhuang City， there are 585 foreign-invested enterprises， 80% more are in-vested by overseas Chinese entrepreneurs，etc. Other provinces and municipalitieshave similar situations.

The statistics from Office of OverseasChinese Affairs under the State Councilshowed that overseas Chinese investedenterprises accounted for more than 70percent of all foreign invested enterprises，and overseas Chinese investment valueaccounted for more than 60% of the totalvalue in Chinese mainland. Among 60-plushigh-tech business incubators establishedin Chinese mainland， the number of High-tech enterprises founded by overseas Chi-nese has reached over 5，000， and their an-nual production value has exceededRMB 10 billion.

Yang Zhongxia of Macro-economyInstitute of the State Development andReform Commission said that actually uti-lized foreign capital had exceeded thethreshold of US$60 billion in 2004， whichindicated that international investors andtransnational corporations had a very goodprospect for Chinese market， and enthusi-asm of overseas Chinese entrepreneurs toinvest in Chinese mainland are increasing.\"Overseas Chinese entrepreneurs are animportant force for the sustainable andhealthy development of Chinese economy.In 2004 China promulgated a lot of poli-cies and regulations on foreign investmentand extended fields for foreign investors.This has provided foreign investors includ-ing overseas Chinese investors with guar-antees to enter into Chinese market， andwill attract more overseas Chinese to in-vest into China.\"

Important

Support of

National Economy

On June 16， Ms ShiJing， Editor-in-chief ofChina's Foreign Trade (En-glish Edition) sponsored byChina Council for the Pro-motion of InternationalTrade (CCPIT) and ChinaChamber of InternationalCommerce (CCOIC)， saidduring the interview bythe reporter of China Eco-nomic Weekly， \"In recentyears， Chinese economicgrowth has been driven bytwo main factors， invest-ment and foreign trade.Thanks to the increase ofthe amount and expansionof the fields of foreign in-vestment， overseas Chi-nese entrepreneurs made aremarkable contributionto Chinese economy. Foreign-funded en-terprises played a huge role in the promo-tion of Chinese foreign trade， and actedtherefore as a main force in the regard.Chinese foreign trade not only boostedChinese economic growth， but also in-creased State tax revenue and foreign ex-change reservation.\"

According to statistics， the proportionof export in China's GDP climbed to 31.1%in 2003 from 4.6% in 1978. According tocalculation， the export's contribution toGDP growth was about 15 to 20%， stimu-lating economic growth for 1.5 to 2 per-centage points on an average. In 2003，import export tax revenue accounted for13.6% of total national tax revenue， amongwhich foreign enterprises accounted for20.4%. Since t990， China has put an endto the trade deficit that had lasted for a longtime. The State foreign exchange reserva-tion amounted to US$403.3 billion by theend of 2003， ranking the second all overthe world and playing a very important rolein preventing financial crises and maintain-ing economic security in China.

According to initial statistics by Chi-nese Customs， from January to May 2005，the gross import and export value of wholecountry amounted to US$522.78 billion，increasing 23.2% year-on-year， includingexport US$276.4 billion， up 33.2%. Thetrade surplus reached US$30.01 billion.According to statistics by Ministry of Com-merce， the export value of foreign-investedenterprises registered in China amountedto US$338.606 billion in 2004， 40.89%more than last year， accounting for 57.07percent of total export value in China.

Long Yongtu， Secretary-General ofBoao Forum for Asia and former Vice-Minister of Foreign Trade and EconomicCooperation， retorted the argument foroverabundant foreign investment at theSixth China Economists' Forum at the endof 2004. He affirmed， \"We should pay at-tention to an issue， that is， foreign investedenterprises contributed to Chineseeconomy， not only in the increase of Statetax revenue; more important， they helpedsolve the unemployment problem inChina.\"

According to the calculation， everyUSS 100 million value of exports can cre-ate 15，000 jobs. Year 2003 witnessed ex-port of US$438.4 billion value of exports，which could help solve the unemploymentfor 65 million people， in-cluding more than 35 mil-lion workers who workedfor the trade involving: theprocessing of supplied rawmaterials.

\"Though there is no ex-act number， it is affirmativethat jobs created by overseasChinese invested enterprisestook a rather large propor-tion in the whole country\"，said Ms Shi Jing， \"at thesame time， many overseasChinese invested enterprisesare small and medium-sizedand labor-intensive manu-facturers， thus providingmany opportunities for employment. With-out question， overseas Chinese investedenterprises played an important role in re-lieving the pressure of unemployment andsolving this problem in China.\"

Promoter of the Practice in

Economic Transition to

Market Economy

\"The mainland Chinese knew what themarket and market economy stand for dur-ing their work in these enterprises. As amatter of fact， market economy can neverbe realized by a designed mode. IfWenzhou mode is the sole market economybased on domestic individual investment，other market economy modes featured inexpanding from southeast coastal areas toinland areas are basically market economybased on foreign investment，\" KangRongping， Director-general of the Re-search Center for World Chinese Entrepre-neurs of Chinese Academy of Social Sci-ences， said to the reporter of China Eco-nomic Weekly.

\"Market economy based on foreign in-vestment was not our voluntary choice atthe beginning. As opening-up policy at-tracted overseas Chinese entrepreneurs toinvest in mainland industries especially inprocessing industry (to process raw mate-rials on clients' demands， assemble partsfor clients and process according to clients'samples and designs; or to engage in com-pensation trade)， the concept of marketeconomy was spread throughout Chinesemainland. Therefore， the tangible role over-seas Chinese entrepreneurs played in trans-ferring Chinese planning economy intomarket economy might be the more far-reaching influence to Chinese economy.We can almost say， without economic ini-tiation by overseas Chinese entrepreneursin the early years， there would be no cur-rent market economy.\"

It is found through survey， as early asthe beginning of opening-up， when othercountries held an attitude of \"wait-and-see\"， overseas Chinese entrepreneurs inHong Kong and Taiwan， owing to the closelinks to their relatives in the mainland，came to invest. Even though they can onlyinvested with \"overseas Chinese remit-tance'' and most capitals were put intosmall and medium-sized enterprises in pro-cessing industry， it was their pioneeringspirit that many \"cities of electrical house-hold appliances\"， \"cities of shoes\"， and\"cities of garments\"， etc in Fujian andGuangdong provinces were formed， stimu-lating the development of local economy.

Even today， this kind of capital inflowis very significant， providing abundantcapital support for local economic devel-opment. On June 12， Financial Institute ofChina Academy of Social Sciences andFujian Financial Academy jointly held aSeminar on Improving Financial Environ-ment and Raising Constructing Funds withDiversified Channels. It was released dur-ing the seminar that at present the \"over-seas Chinese remittance\" remitted to FujianProvince reached more than RMB 20 bil-lion every year， thus becoming an impor-tant source of civilian idle money and bankdeposit in the Province. According to sta-tistics of State Administration of ForeignExchange Fujian Branch， from 2001 to2004， the private income involved withforeign interests amounted to USS 11.125billion， (Or RMB92 billion)， about 59.2%of the increased foreign exchange depositof the Province during the correspondingperiod. Adding money flown in cash， theprivate income involved with foreign in-terests will be far more than that amount.

In the hometowns of overseas Chinesein Guangdong， Fujian， Zhejiang etc.， alarge sum of overseas Chinese remittancehas turned into production capital or start-up fund， and a lot of technological equip-ment were free transferred. Enterprises in-vested by overseas Chinese have been likebamboo shoots after a spring rain.

\"This can be described as a singlespark in the early stage of Chinese marketeconomy\"， said Kang Rongping， \"one ofmy classmates became a manager in oneof such enterprises. He originally went toa small-sized garment factory. From anordinary worker， he was promoted to work-shop director， then factory director. Finallyhe opened his factory， so he was trained tobe a boss by his boss.\"

Bao Yujun， former Vice-Chairman ofNational Association of Industry and Com-merce and present Chairman of China Non-Governmental Economy Seminar， acted asthe spokesman at the Sixth World ChineseEntrepreneurs Convention in 2001. Hepointed out in his article after the Conven-tion \"the construction of China's invest-ment environment and legal system needsa process of regulating and perfecting. Dur-ing the process， western investors alwaysheld skeptical attitude， but overseas Chi-nese entrepreneurs held attitude of advanc-ing， promoting and assisting owing to thesame language and culture. On one hand，they helped improve Chinese investmentenvironment， on the other hand， they me-diated between China and foreign coun-tries and regions by means of Chinese en-trepreneurs network.\"

\"Relying on special Chinese entrepre-neurs network and experiences to controlthe market， they helped Chinese mainlandenterprises shake off the yoke of traditionalplanning market， and realized the stabilizedtransition from planning economy to mar-ket economy. This might be the most im-portant role overseas Chinese entrepre-neurs played in Chinese economic con-struction and reform and opening-up，\" heconcluded. Mr. Thurow， former U.S.President's Economic Advisor probablysaw most clearly as a spectator and pointedout with a keen eye， \"the greatest contri-bution overseas Chinese entrepreneursmade to the reform of Chinese mainland isnot only the investment， but also the expe-riences they taught their compatriots howto adapt themselves to the rule of marketeconomy.\"

Insiders generally considered， duringthe transitional period from Chinese plan-ning economy to market economy， com-patriots in Hong Kong， Macao and Taiwanas well as other overseas Chinese world-wide provided the most direct experiences.The cooperation and assistance given bynumerous overseas Chinese are just aboutan important factor for vigorous Chineseeconomy.

Direct Flight to the OutsideWorld

\"Some people believed the 21th Cen-tury to be the century of America， somebelieved the century of China， and somebelieved the century of Europe; I am in-clined to the century of Chinese\"， saidKang Rongping， \"Chinese people are notonly superior in numbers， but also in dis-tribution -- residing in 168 countries andregions all over the world. If you put to-gether several economic entities includingChinese mainland， Hong Kong， MacaoTaiwan， and overseas Chinese entrepnneurs in other countries and regions， thescale and strength must come first on tilist in the world. Moreover， wherever Chnese inhabited， Chinese economy there amost became the pillar of the locleconomy.\"

Dr. Shan Chun from Chinese ResearcCenter of Nationality Institute， ChinaAcaeemy of Social Sciences， believed the same\"one of the biggest contributions overseaChinese entrepreneurs made to Chineseconomy is that they invested in China， anhelped Chinese people accept concept cmarket economy， which promoted Chinesreform with the lowest cost and integrate，Chinese economy into world economisystem. This is also a huge contribution t，the world economy.\"

Some people compared China wit]Russia in terms of economic reform antforeign investment， and realized China'success benefited considerably from th.participation of overseas Chinese. In comparison， Russia is short of groups of\"overseas Russian entrepreneurs\".

It was reported， if people markedsmall red flag in every city where ChineseCommunities inhabit， the whole matwould turn into a piece of red paper.

Chinese Communities， Chineseschools and Chinese newspapers are callerthree pillars of overseas Chinese. Now， thcnumber of Chinese association in the workreached over 4000， and that of Chinesechambers of commerce more than 400which have become ties linking Chineseincluding Chinese entrepreneurs and civil-ian bridges maintaining blood relationshi[of Chinese.

Overseas Chinese entrepreneurs werecalled once a time the \"bellwether\" oftransnational corporations to invest inChina. Their pioneer investments got greatsuccesses， setting an example in investingChina for overseas including western in-vestors. Overseas Chinese economy hasbeen a component part of that of their hostcountries， and the achievements overseasChinese entrepreneurs had made in theworld economy played a unique role in ac-celerating interactions between their hostcountries and other countries， especiallybringing China's economy more in linewith world economy.

During the process， overseas Chineseentrepreneurs played important role morein introducing foreign companies intoChina in the past years， but in the years tocome， some overseas Chinese entrepre-neurs of high prestige will play a role ofagency and bridge to introduce Chinese en-terprises to the outside world.

It is reported， Zheng Yuncheng， Gen-eral Manager of Founder Group MalaysianBranch， had been a famous poet of Chi-nese origin and social activist before hetook up the post， and Founder Group Japa-nese Branch President Guan Xianghonghad been an undergraduate of Peking Uni-versity and a student studying in Japan.Since they have a thorough understandingabout the market and culture of both coun-tries， they led their branches to play activeroles in local development. In 2000，F(xiàn)ounder Group Japanese Branch got an in-vestment of USS 10million from a Japaneseank; at that time it was valued at US$70million， a very high price. In April 2002，F(xiàn)ounder Group Malaysian Branch was suc-cessfully listed in Malaysian Stock Ex-changes， raising fund amounting to Malay-sian Dollar 8.77 million， accordingly be-ing the first domestic enterprise of main-land China to be listed in Malaysia.

John Naisbitt said in his bookMegatrends Asia that Chinese Communityis the company and enterprise networkbased on patriarchal clan and fellowprovincials and townsmen. The scale of theenterprises continued to expand， till cov-eting the whole world. Vividly speaking，this network is just like today's computer-based Intemet.

The important factor to maintain thisnetwork lies in the recognition and carry-ing on of Chinese traditional culturefounded on Confucianist culture. In No-vember 1993， the Second World ChineseEntrepreneurs Convention was held inHong Kong， which was described by Hun-tington as \"a celebration of Chinese entre-preneurs all over the world to strengthentheir belief in success\". He said， \"the cul-tural commonness in Chinese Communi-ties promoted their participation in eco-nomic activities.\"

Some insiders believed one of the mostimportant masons for the successes of over-seas Chinese entrepreneurs is that they in-tegrated Chinese traditional culture， localculture and western culture into their en-terprise culture. This kind of combinationundoubtedly built a smooth and convenientapproach for Chinese enterprises to real-ize internationalization and globalization.

In the time of globalization， culture isone of the core factors of a nation's com-petitive capabilities in the world. Culture isalso the most important \"social capital\" tosupport a nation's economic development.The rain of economy is always the forewarn-ing of the rain of culture， and the growingup of economy sometimes promises culturalrenaissance. Therefore， some insiders pro-posed， in view that Chinese sustained eco-nomic development has laid a foundationfor China's cultural renaissance and height-ened people's self-confidence in Chineseculture， so we should intensify national co-herence and integrate world resources bymeans of reconstruction of culture， to es-tablish a \"cultural China\" beyond bound-aries with Chinese as a basic force， enhanc-ing Chinese national competitive capacitiesand laying solid foundation for the greatrejuvenation of the Chinese nation.

In 1405， Ming Dynasty EmperorCheng Zu issued Imperial Edict to orderMr. Zheng He to lead on 27，800 personson 62 ships， embarking on the \"Ocean Voy-age to the West\". While spreading Chineseculture， the voyage made a preeminent con-tribution to the world peace. From thattime， \"Chinese entrepreneurs\" as a specialexpression began to be written into ancientbooks and records， and be well known byboday's people.

More than 600 years passed sincezheng He voyaged the West; time bringsgreat changes to the world. The Eighthworld Chinese Entrepreneurs Convention，which attracted worldwide attention， willbe held at COEX Hotel， Seoul， capital ofhe Republic of Korea on October 9 to[2，2005. The theme of the Convention is'Growing up together with Chinese entre-breneurs， and getting prosperity togethervith the world\". It can be predicted， the2onvention will further facilitate Chineseeconomy to access to the world economicystem， attract world investors to share\"Chinese opportunities\"， and make new\"Chinese contributions\" to the worldeconomy while enhancing Chinese com-prehensive strength.

(Matthew marshalling， deputy editor-u-chief of China Economic Weekly)