Beware of the potential risks arising from overseas M&As

THE TOTAL VALUE OF CHINESE ENTERPRISES' overseas mergers and acquisitions in the first quarter of this year exceeded $100 billion, almost equal to that of the total last year. Thepaper.cn comments:

Overseas mergers and acquisitions by Chinese enterprises are an increasingly evident trend. More than 1,600 of the 2,800 domestic companies listed in the Shanghai-based A-share market are valued at more than $1 billion. In contrast, many overseas companies are valued at less than $100 million even though they are performing well. This has resulted in domestic companies having the confidence to engage in an increasing number of M&As overseas.

Domestic investors welcome such moves because that might enhance the position of domestic companies in the global value chain, and produce further dividends for them.