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

Multimedia Social Media Documenting, Not Driving, Hong Kong Protests

Unlike in Arab Spring uprisings, pro-democracy protesters in Hong Kong aren't relying on Twitter and Facebook to organize, but social media still plays a role More

Analysis: Occupy Central Not Exactly Hong Kong’s Tiananmen

VOA's former Hong Kong, Beijing correspondent compares and contrasts 1989 Tiananmen Square protest with what is now happening in Hong Kong More

Bambari Hospital a Lone Place of Help in Violence-Plagued CAR

Only establishment still functioning in CAR's second city is main hospital 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.
The Legacy of Jimmy Carter: The Preacher from Plainsi
X
October 01, 2014 10:45 AM
It is common in the United States to see tourists flock to sites associated with America's presidents. Some are privately owned and others are run by the National Park Service or the National Archives -- but most have helped draw business and people into the towns and cities where they are located. As VOA’s Kane Farabaugh reports, there is one particular presidential hometown that is unique in what it has to offer those who make the trip.
Video

Video The Legacy of Jimmy Carter: The Preacher from Plains

It is common in the United States to see tourists flock to sites associated with America's presidents. Some are privately owned and others are run by the National Park Service or the National Archives -- but most have helped draw business and people into the towns and cities where they are located. As VOA’s Kane Farabaugh reports, there is one particular presidential hometown that is unique in what it has to offer those who make the trip.
Video

Video Hong Kong Protests Draw New Supporters on National Holiday

On the 65th anniversary of the founding of Communist China, Hong Kong protesters are hoping to stage the largest pro-democracy demonstration since the 1989 Tiananmen protests. VOA's Brian Padden visited one of the protest sites mid-day, when the atmosphere was calm and where the supporters were enthusiastic about joining what they are calling the umbrella revolution.
Video

Video India's PM Continues First US Visit

India's prime minister is on his first visit to Washington, to strengthen political and economic ties between the world's oldest and the world biggest democracies. He came to the U.S. capital from New York, the first stop on his five-day visit to the country that denied him an entry visa in the past. From Washington, Zlatica Hoke reports Modi seemed most focused on attracting foreign investment and trade to increase job opportunities for his people.
Video

Video Malaysia Struggles to Stop People Joining Jihad

Malaysian authorities say militant groups like the so-called "Islamic State" have used social media to entice at least three dozen Malaysian Muslims to fight in what they call "jihad" in Syria and Iraq. As Mahi Ramkrishnan reports from Kuala Lumpur, counterterrorism police are deeply worried about what could happen when these militants return home.
Video

Video Could US Have Done More to Stop Rise of Islamic State?

President Obama says airstrikes against Islamic State militants in Syria will likely continue for some time because, in his words, "there is a cancer that has grown for too long." So what if President Obama had acted sooner in Syria to arm more-moderate opponents of both the Islamic State and the Syrian government? VOA State Department Correspondent Scott Stearns reports from the United Nations.
Video

Video Treasure Hunters Seek 'Hidden Treasure' in Central Kenya

Could a cave in a small village in central Kenya be the site of buried treasure? A rumor of riches, left behind by colonialists, has some residents dreaming of wealth, while others see it as a dangerous hoax. VOA's Gabe Joselow has the story.
Video

Video Ebola Patients Find No Treatment at Sierra Leone Holding Center

At a holding facility in Makeni, central Sierra Leone, dozens of sick people sit on the floor in an empty university building. They wait in filthy conditions. It's a 16-hour drive by ambulance to Kailahun Ebola treatment center. Adam Bailes was there and reports on what he says are some of the worst situations he has seen since the beginning of this Ebola outbreak. And he says it appears case numbers may already be far worse than authorities acknowledge.
Video

Video Identifying Bodies Found in Texas Border Region

Thousands of immigrants have died after crossing the border from Mexico into remote areas of the southwestern United States in recent years. Local officials in south Texas alone have found hundreds of unidentified bodies and buried them in mass graves in local cemeteries. Now an anthropologist and her students at Baylor University have been exhuming bodies and looking for clues to identify them. VOA’s Greg Flakus has more from Waco, Texas.
Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.

AppleAndroid