Experience of China in the realisation of geopolitical interests through the implementation of cross-border investments and providing cross-border credits: lessons for Ukraine

The beginning of the 21st century China met as an updated and economically powerful state. The program of reform and openness brought good results. China held global leadership in attracting foreign investments and became a world leader in economic development. However, over the years it became increasingly difficult for Chinese companies to enter foreign markets and even more difficult to keep them. With the rising cost of labor China is gradually losing one of its main competitive advantages, such as cheap labor. Competition in world markets exacerbated with the advent of cheap goods’ substitutes primarily from countries in Southeast Asia. With a strong economic base and cash reserves, Chinese leaders felt certain isolation from the outside world. Besides, developed countries increased their measures aimed at protecting domestic markets from Chinese goods.

In 2001 Chinese government approved the program of “globalization”, under which China had to strengthen its presence in global markets. An important focus of the new development model was to enter foreign markets through increased foreign investments. Foreign investments were made in two directions. First – investments in developing countries, which were carried out by specialized agencies: National Investment Fund and China Investment Corporation. As the result, China gained access to raw materials and mineral resources of developing countries.

Second – investments of Chinese companies abroad through the deals of mergers and acquisitions. As the result, China has received advanced technology and modern management.

Today, most economists recognize that the inevitable leadership of China in the world economy is only a matter of time.

China’s experience in the policy of increased international presence is relevant for Ukraine in terms of studying the approaches, methods and measures for its implementation.