Officials reassure foreign investors on M&As
Updated: 2007-08-02 11:25
Chinese officials have reassured overseas investors that the country still welcomes foreign investment in the form of mergers and acquisitions (M&As), amid domestic worries that they may threaten national economic security.
The message was sent by a string of positive comments on foreign M&As made by Chinese officials.
Chinese businesses should neither demonize nor make light of foreign mergers and acquisitions in a globalizing economy, the People's Daily quoted Liao Xiaoqi, vice minister of commerce (MOC), as saying on Tuesday.
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Liao said the government would like to see the healthy development of M&As under proper regulation and management.
Minister of Commerce Bo Xilai seemed to be optimistic about the foreign M&As, saying they could bring new opportunities to Chinese enterprises and China was just getting started in this field.
The MOC statistics showed that foreign mergers and acquisitions account for only 2.5 percent of all forms of foreign direct investment in China, while the proportion averaged 80 percent worldwide.
However, foreign M&As came under scrutiny in China as foreign companies began to acquire major State-owned enterprises or companies with famous brands in recent years, such as private equity firm Carlyle's attempt to buy a 45-percent stake in Xugong Construction Machinery, the country's largest construction equipment maker.
China's top legislature has read for the second time a draft anti-monopoly law that requires foreign purchases of Chinese companies to go through checks to ensure there is no negative effect on China's national security.
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