Shen Danyang, Spokesman of the Ministry of Commerce (MOC), said recently that China will support foreign participation in state-owned enterprises (SOEs) reform by way of merger and acquisition (M&A).

 

Shen said against the limited carrying capacity of resources and energy, encouraging foreign M&As is helpful for China to liquidize the supply stock, drive the industrial transform and upgrade, and introduce international advanced management experiences so as to improve the international competitiveness of Chinese enterprises.

 

He said the proportion of cross-border M&As had increased to 38% of the global foreign investment in 2015. In the same period, foreign investors invested US$17.8 billion in China by way of M&As, accounting for 14% of the introduced foreign investment of China. M&As by foreign capital have grown steadily in recent years, though the overall scale and proportion are still far below international standards. The “M&A boom” has not formed in China yet, Shen said.

 

The cross-border M&A is reportedly an important way of foreign direct investment across the world. According to the statistics of the United Nations Conference on Trade and Development, the cross-border M&A has always taken a relatively high proportion in the global capital flow and active M&As would normally drive substantial growth of the international capital flow. For example, the cross-border M&A grew by 61% in 2015, driving the global cross-border investment to grow by 36%.

 

Source: Translated from Invest Guangzhou, March 7, 2016