News / Asia

Chinese Companies Chasing Foreign Assets

Li Shufu, right, chairman of Chinese automaker Geely, speaks while a photo of a Volvo car is projected on a screen during a press conference in Beijing, 30 Mar 2010
Li Shufu, right, chairman of Chinese automaker Geely, speaks while a photo of a Volvo car is projected on a screen during a press conference in Beijing, 30 Mar 2010
Heda Bayron

A new survey of Chinese companies says many are planning to acquire overseas assets in the next three years. Cash-flush Chinese companies are looking for new markets and know-how for their businesses.

China's biggest state-owned bank, the Industrial and Commercial Bank of China, recently announced it has acquired a U.S. securities brokerage for one dollar. The sale of Prime Dealer Services, a small unit of Fortis Securities, required ICBC to take over the company's debts. ICBC says it is also looking to acquire assets in Southeast Asia.

Last month, the state-owned China National Offshore Oil Corporation bought a one-third stake in a Texas natural gas field.

These are just few of an increasing number of Chinese acquisitions worldwide. Last year, Chinese companies invested about $43 billion in overseas mergers and acquisitions.

Jeremy Fearnley, head of mergers and acquisitions at the consulting firm KPMG in Hong Kong, says Chinese companies - both state-owned and private businesses - are seeking acquisitions overseas.

KPMG surveyed more than 150 executives of Chinese companies on their plans for overseas investments in the next three years.

"Eighty-five percent of the people we interviewed are looking to do M&As," said Fearnley.  "Everyone has it on their agenda really."

Most of the companies surveyed with less than $150 million in revenue say they are looking to invest in Asia, while about half of respondents with larger revenue are planning to snap up assets in North America and Europe, as well as Asia.

"Where we see people looking more to the U.S. and Europe are really to acquire IT, brands, and technology - assets that they can then [use to] take their business to the next level," added Fearnley.  "Now that might be to export more in those overseas markets. Alternatively, it can be to sell more of those products using a better known international brand or using high technology to give it an advantage in their local market or into China."

For example, Chinese carmaker Geely completed its acquisition of Ford Motors' stake in the Swedish carmaker, Volvo, in August. Volvo plans to open new factories in China and sell Chinese-made cars in Europe.

Chinese companies have invested widely in Africa and Latin America too, mainly in mining and oil and gas, as part of the country's strategy to ensure a supply of raw materials for its fast-growing economy.

However, in the past, Chinese investments in strategic U.S. industries such as energy have failed due to security concerns. In 2005, CNOOC, the same company that bought into the Texas gas field, failed to take over Unocal. Anshan Iron and Steel's joint venture with Steel Development Co. to build a reinforced bar factory in Mississippi faced opposition from some U.S. lawmakers.

The KPMG survey says Chinese companies' relative inexperience in deal-making, cultural differences and decision-making processes sometimes hamstring their abilities to close deals. The majority want to have Chinese control of their target companies, although others are more pragmatic when faced with ownership restrictions.

Chen Jian, China's vice minister for commerce, this week urged the U.S. to open up to more Chinese investments. The ministry said Chinese investments in the U.S. for the first nine months of the year rose 530 percent from last year.

You May Like

Kurdish President: More Needed to Defeat Islamic State

In interview with VOA's Persian Service, Massoud Barzani says peshmerga forces have not received weapons, logistical support needed to successfully fight IS in northern Iraq More

Sierra Leone's Stray Dog Population Doubles During Ebola Crisis

Many dog owners fear their pets could infect them with the virus and have abandoned them, leading to the increase and sparking fears of rabies More

Video New Brain Mapping Techniques Could Ease Chronic Pain

New methods for mapping pain in the brain not only validate sufferers of chronic pain but might someday also lead to better treatment More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
New Brain Mapping Techniques Could Ease Chronic Paini
X
Shelley Schlender
April 20, 2015 7:03 PM
Pain has a purpose - it can stop you from touching a flame or from walking on a broken leg. As an injury heals, the pain goes away. Usually. But worldwide, one out of every five people suffers from pain that lasts for months and years, leading to lost jobs, depression, and rising despair when medical interventions fail or health experts hint that a pain sufferer is making it up. From Boulder, Colorado, Shelley Schlender reports that new methods for mapping pain in the brain are providing validation for chronic pain and might someday guide better treatment.
Video

Video New Brain Mapping Techniques Could Ease Chronic Pain

From Boulder, Colorado, Shelley Schlender reports that new methods for mapping pain in the brain are providing validation for chronic pain and might someday guide better treatment.
Video

Video Hope, Prayer Enter Fight Against S. Africa Xenophobia

South Africa has been swept by disturbing attacks on foreign nationals. Some blame the attacks on a legacy of colonialism, while others say the economy is to blame. Whatever the cause, ordinary South Africans - and South African residents from around the world - say they're praying for the siege of violence to end. Anita Powell reports from Johannesburg.
Video

Video Italy Rescues Migrants After Separate Deadly Capsize Incident

Italy continued its massive search and rescue operation in the Mediterranean Monday for the capsized boat off the coast of Libya that was carrying hundreds of migrants, while at the same time rescuing Syrian migrants from another vessel off the coast of Sicily. Thirteen children were among the 98 Syrian migrants whose boat originated from Turkey on the perilous journey to Europe.
Video

Video New Test Set to Be Game Changer in Eradicating Malaria

The World Health Organization estimates 3.4 billion people are at risk of malaria, with children under the age of five and pregnant women being the most vulnerable. As World Malaria Day approaches (April 25), mortality rates are falling, and a new test -- well into the last stage of trials -- is having positive results in Kenya. Lenny Ruvaga reports for VOA from Nairobi.
Video

Video Are Energy Needs Putting Thailand's Natural Beauty at Risk?

Thailand's appetite for more electricity has led to the construction of new dams along the Mekong River to the north and new coal plants near the country's famous beaches in the south. A proposed coal plant in a so-called "green zone" has touched off a debate. VOA's Steve Sandford reports.
Video

Video Overwhelmed by Migrants, Italy Mulls Military Action to Stabilize Libya

Thousands more migrants have arrived on the southern shores of Italy from North Africa in the past two days. Authorities say they expect the total number of arrivals this year to far exceed previous levels, and the government has said military action in Libya might be necessary to stem the flow. VOA's Henry Ridgwell reports.
Video

Video Putin Accuses Kyiv of ‘Cutting Off’ Eastern Ukraine

Russian President Vladimir Putin, in his annual televised call-in program, again denied there were any Russian troops fighting in Ukraine. He also said the West was trying to ‘contain’ Russia with sanctions. Henry Ridgwell reports on reactions to the president’s four-hour TV appearance.
Video

Video Eye Contact Secures Dog's Place in Human Heart

Dogs serve in the military, work with police and assist the disabled, and have been by our side for thousands of years serving as companions and loyal friends. We love them. They love us in return. VOA’s Rosanne Skirble reports on a new study that looks at the bio-chemical bond that cements that human-canine connection.
Video

Video Ukrainian Volunteers Search for Bodies of Missing Soldiers

As the cease-fire becomes more fragile in eastern Ukraine, a team of volunteer body collectors travels to the small village of Savur Mohyla in the what pro-Russian separatists call the Donetsk Peoples Republic - to retrieve bodies of fallen Ukrainian servicemen from rebel-held territories. Adam Bailes traveled with the team and has this report.
Video

Video Xenophobic Violence Sweeps South Africa

South Africa, long a haven for African immigrants, has been experiencing the worst xenophobic violence in years, with at least five people killed and hundreds displaced in recent weeks. From Johannesburg, VOA’s Anita Powell brings us this report.
Video

Video Apollo 13, NASA's 'Successful Failure,' Remembered

The Apollo 13 mission in 1970 was supposed to be NASA's third manned trip to the moon, but it became much more. On the flight's 45th anniversary, astronauts and flight directors gathered at Chicago's Adler Planetarium to talk about how the aborted mission changed manned spaceflight and continues to influence space exploration today. VOA’s Kane Farabaugh reports.
Video

Video Badly Burned Ukrainian Boy Bravely Fights Back

A 9-year-old Ukrainian boy has returned to his native country after intensive treatment in the United States for life-threatening burns. Volodia Bubela, burned in a house fire almost a year ago, battled back at a Boston hospital, impressing doctors with his bravery. Faith Lapidus narrates this report from VOA's Tetiana Kharchenko.
Video

Video US Maternity Leave Benefits Much Less Than Many Countries

It was almost 20 years ago that representatives of 189 countries met at a UN conference in Beijing and adopted a plan of action to achieve gender equality around the world. Now, two decades later, the University of California Los Angeles World Policy Analysis Center has issued a report examining what the Beijing Platform for Action has achieved. From Los Angeles, Elizabeth Lee has more.
Video

Video Endangered Hawaiian Birds Get Second Chance

Of the world's nearly 9,900 bird species, 13 percent are threatened with extinction, according to BirdLife International. Among them are two Hawaiian honeycreepers - tiny birds that live in the forest canopy, and, as the name implies, survive on nectar from tropical flowers. Scientists at the San Diego Zoo report they have managed to hatch half a dozen of their chicks in captivity, raising hopes that the birds will flutter back from the brink of extinction. VOA’s George Putic reports.
Video

Video Exhibit Brings Renaissance Master Out of the Shadows

The National Gallery of Art in Washington has raised the curtain on one of the most intriguing painters of the High Renaissance. Mostly ignored after his death in the early 1500s, Italian master Piero di Cosimo is now claiming his place alongside the best-known artists of the period. VOA’s Ardita Dunellari reports.

VOA Blogs