CMIG Can Become a Role Model as Private Capital "Goes Global"

Back to the days when China and the United States established diplomatic ties, Mr. Stephen A. Orlins was part of the endeavor. For Mr. Orlins, China is a must-visit every year. The National Committee on U.S.-China Relations, where he serves as the president, has been committed to improving US-China relations and calling on the US government to relax restrictions on Chinese investment. Since the beginning of this year, Mr. Orlins has had another title -- international investment advisor of China Minsheng Investment Corp., Ltd. (hereinafter referred to as "CMIG"), the largest private investment group in China. This new status provides him with a great opportunity to fully understand Chinese private companies, and then gain a deeper understanding about China's booming overseas investment.

CMIG mode of investment abroad

"Now, in English we say 'the shoe is on the other foot'," Mr. Orlins said when receiving the exclusive interview of China Minsheng New Era.

In the past 35 years, investment by western companies in China has been the main trend, while overseas investment made by Chinese firms has been extremely rare. But at this point, driven the "One Belt One Road" and "Going Global" policies, information about investments made by Chinese enterprises abroad comes one after another. Until recently, CMIG announced that it will lead dozens of leading Chinese private companies in advantageous industries to invest 5 billion US dollars in Indonesia. The fund will be used to build China Minsheng new-type industrial town and updated industrial park. In addition, the investment scale is expected to surpass tens of billions of US dollars in the short run.

Among the Chinese companies "Going Global", Mr. Orlins highly values CMIG.

For his part, CMIG's unique business mode manifested by industry-finance integration enjoys a strong competitive edge.

"CMIG's shareholder structure and capital strength could allow it to invest overseas successfully. So CMIG could find different investment  opportunities  in  Europe, Japan, the Association of Southeast Asian Countries (ASEAN) and the US," Mr. Orlins said.

"CMIG's shareholders are diversified and come from different industries and fields, so different shareholders will play different roles in each of the investment. The shareholding structure of CMIG is very broad,giving the company the opportunity to draw on the expertise that exists within the shareholders."

As a Chinese saying goes like this, "good preparations underpin any endeavor." When CMIG makes decisions on investing abroad, a group of elites from around the globe serve as its high-end think tank.

The Global Advisory Council of CMIG was launched in January this year, which is composed of such outstanding global tuminaries,such as Romano Prodi, Former Prime Minister of Italy, Dominique De Villepin, Former Prime Minister of France, and Robert Engle, 2003 Nobel Laureate in Economics, to name but a few. Such a think tank -- a strong team of political VIPs, Nobel Laureate and business giants -- will give a strong boost to CMIG as it extends its reach to the wider global market.

During inaugural Global Advisory Council meeting, Mr. Orlins said frankly that "it seems that Americans don't like investment made by Chinese state-owned enterprises. This is because they regard the investment as an act incited by the Chinese government. However, investment and cooperation from private firms are welcomed very much. So it's truly necessary for China to establish a large private investment group."

As the pioneer and role model of the "Going Global" campaign of private capital, CMIG has, since its inception, seized on this opportunity and taken "the full utilization of domestic and overseas resources and markets, and following the national globalization strategy" as its strategic vision.

"China's 'One Belt One Road' and 'Going Global' strategy will serve as one of the pillars of Chinese relations with the rest of the world. So the people who participate in this “Zou Chu Qu” (Going Global) plan are just as ambassadors for Chinese culture, history, traditions and values," Mr. Orlins said.

He pointed out that CMIG's investment in Asia and the U.S. can promote and enhance Chinese relations with the rest of the world and the China-US relations.

Supporter of the US-China relations

Mr. Orlins is one of the few Americans who have witnessed the development and enrichment of the China-US ties from scratch.

At the beginning of the establishment of the diplomatic ties between China and the U.S., the then U.S. President Carter was his superior at the State Department and called him "Small Potato" intimately. Back then, the special mission only had a few members to facilitate the establishment of the diplomatic ties. However, the rapid development of the China-US relations in the subsequent 35 years is unforeseeable for them at that time.

As a member of the legal team for the establishment of the Sino-U.S. diplomatic relations, Mr. Orlins came to China to represent the first wave of US investors after both countries established the diplomatic ties in 1979. According to him, China was black and white at that time. "But today, China is colorful in my eyes. Chinese children have access to better education.

More clothes and daily necessities of higher quality are made available to the Chinese people. Medical environment is getting better and better. I am the witness of all the changes."

"In 1979, I came to China to represent the first wave of US investors in China in the period of Deng Xiaoping called in the 'Gai Ge Kai Fang' (reform and opening-up). The relationships that I built with the companies that I invested, those Chinese people receiving the US investment and the other Americans that they worked with became the strongest supporters of constructive US-China relations over the next 35 years," Mr. Orlins said.

Since then, Mr. Orlins has a forged an indissoluble bond with China. His professional footprint has been in Asia. His previous positions include the President of Lehman Brothers Asia, founder of Carlyle Asia and the chairman of the board of Taiwan Broadband Communications. He has been the president of the National Committee on U.S.-China Relations since 2005.

Mr. Orlins believs that Chinese entrepreneurs who are making investment in the US will be the strongest supporters of constructive US-China relations in the next 35 years.

"So Chinese investors such as CMIG are coming to America. Chinese people who make investment in the US, and Americans who benefit from the Chinese investment will be the strongest supporters of constructive US-China relations in the next 35 years, just as the Americans coming to invest in China and the Chinese receiving the US investment who were the strongest supporters of constructive US-China relations over the last 35 years."

Contributions made by the Chinese

companies to the USA report jointly released by the National Committee on U.S.-China Relations and Rhodium Group indicated that by the end of 2014, 1,583 organizations had been operating in the US, which employ more than 80,000 Americans. "These investors will become important supporters who promote the China-US relations in the coming 35 years," Mr. Orlins said in the interview.

He spoke bluntly that the China-  US friendship has been advanced from the incipient stage to the stage of joint development. "It's well-timed. Only a strong wind is required to facilitate the recovery of the US economy. Moreover, the Chinese economy calls for 'strength-borrowing' to realize constant growth. China has preliminarily demonstrated confidence either in expanding overseas investment, or in enhancing the liquidity of international capital. This will be a 'good play' and a rare opportunity. The key lies in how China and the US capitalize on this opportunity!" At the moment, the Chinese economy is increasingly integrating with the world economy. The development of the Chinese economy is having a profound impact on the global economy. The "One Belt One Road" strategy is attracting the most attention of the world. And the new pattern and opening situation it shows means that any interested country and economy could join this endeavor and engage in win-win cooperation. For Chinese companies, this is the best time for them to "Go Global".

Regarding the investment made by Chinese companies in the US, the abovementioned report noted that Chinese companies failed to play an important role in the history of the US economy. Foreign direct investment (FDI) of the two countries was mainly featured by the one-way investment from the US to China between the 1980s and 2000. That said, China's FDI in the US has taken shape over the years. Chinese-funded companies are approaching the Americans as new neighbors.

The report also showed that the direct investment of Chinese companies is far from saturated. For now, the direct investment of Chinese companies in the US is still at its incipient stage, which is almost equivalent to the size of investment made by Japanese companies in the US in the 1980s. Besides that, the investment of Chinese companies has the potential to create more jobs and profits for the US. If the US continues to become the major destination of China's flourishing overseas investment, it's expected that by 2020, the US will obtain 100-200 billion US dollars worth investment from Chinese entrepreneurs. At the present rate of job creation, such investment is bound to provide 200,000-400,000 full- time jobs for the Americans.

Mr. Orlins believed that the US examinations on Chinese investment reported frequently are nothing more than media-fuelled issues. "In the US, the local government, the county government, the municipal government and the state government welcome Chinese investment because it creates jobs in the locality. The federal government is concerned with the national security, and is sometimes less welcoming of Chinese investment. So there is concern about investment in the defense industry and telecommunications that may have an impact on national security. But the overall majority -- nearly 99% of Chinese investors in the US invest very smoothly and America is completely open to investment," Mr. Orlins said.

He said that "there are so many opportunities available for China in America, such as opportunities in the financial service area, manufacturing, infrastructure investment, distribution, and selling Chinese products to the US."