Ministry of Commerce: Overseas M&A of private enterprises will be a new bright spot for cross-border mergers and acquisitions

Wang Chao, vice minister of the Ministry of Commerce, attended the 2010 Enterprise External Investment and Risk Management Forum in Xiamen on September 9. He stated that “China's foreign investment will be an important form of China’s foreign investment in the form of foreign investment. It is particularly important that private enterprises The overseas M&A will become a new bright spot for Chinese overseas M&A."

Wang Chao pointed out that in the face of the new situation, Chinese enterprises should seize the new opportunity of industrial adjustment in the world, gradually extend from the low end of the industrial chain to the high end in the international industrial chain division, cultivate their own brands, enhance product design, research and development, marketing and cross-border Management capabilities.

In the field of investment, he proposed that Chinese companies should gradually focus on services and small-scale processing in the past, and develop energy, mineral resources, mechanical and electrical product processing and manufacturing, infrastructure and high-tech industries.

In terms of investment, Wang Chao said that mergers and acquisitions will become the main form of Chinese companies’ foreign investment.

“Especially worthy of attention is that in the future, overseas mergers and acquisitions by private enterprises will become a new bright spot for China’s cross-border mergers and acquisitions.” He said that since the beginning of this year, Chinese companies have been in the mining, automotive, IT, service and cleantech industries. , there are eye-catching cases of overseas mergers and acquisitions.

Lu Jinyong, director of the FDI Research Center of the University of International Business and Economics and director of the China Investment Promotion Research Center, said that the number of foreign investment in private enterprises in China is relatively small, of which 70% are state-owned enterprises. Therefore, in the future, more efforts should be made to encourage private enterprises to invest overseas.

Lu Jinyong said that the data showed that at the end of 2007, China had 3,429 multinational companies. China's implementation of the "going out" strategy will follow the development path of commodity output - capital output - brand output - cultural output. At present, China has just moved from the first stage to the second stage. Therefore, it is still very long for Chinese enterprises to go out. Developing multinational corporations to develop independent brands and autonomous technologies will help accelerate the process of "going global" for Chinese enterprises. The development of cross-border mergers and acquisitions will be the main form of direct foreign investment by Chinese enterprises.

Wang Chao also pointed out that China's policy package to stimulate the economy has achieved good results, and the favorable trend of economic recovery has been continuously consolidated. At the same time, China’s foreign investment has also continued to maintain a stable trend.

Data show that from 2002 to 2009, the average annual growth rate of China's foreign investment was 48.6%. In 2009, global foreign direct investment fell by 37%, but China’s foreign direct investment increased by 6.5% in contrarian conditions, ranking sixth in the global rankings. From January to June this year, non-financial foreign direct investment by Chinese investors was US$17.84 billion, an increase of 44% year-on-year. As of June of this year, the stock of non-financial foreign direct investment in China exceeded US$230 billion, the total assets of overseas enterprises reached US$1.2 trillion, and the investment region was spread over 174 countries and regions in the country.

Based on the above analysis, Lu Jinyong predicts that in the next 10 years, it will be calculated according to the annual growth rate of China’s foreign investment of 10%. It is estimated that in 2015, China’s foreign investment will exceed 100 billion U.S. dollars. In 2018, China’s foreign direct investment is expected to reach US$145 billion.