Mergers and takeovers of Chinese companies by foreign
investors brought in actual investment of 1.4 billion U.S. dollars last year, up
49 percent from a year earlier but accounting for only two percent of the total
foreign investment in use in 2006.
Greenfield investment, or new
operations on a bare site, remained the dominant foreign investment, Sun Peng,
deputy director of the Foreign Investment Department with the Ministry of Commerce, said on Friday at the 2007 International
Business Group Annual Conference.
The government approved almost 1,300
foreign mergers and acquisitions (M&As) last year, up 25 percent from 2005, but most were
non-state-owned enterprises, accounting for 62 percent of last year's total
foreign contractual merger and acquisition investment of 4.8 billion U.S.
dollars.
Foreign investment in manufacturing through mergers and
acquisitions totaled 1.7 billion U.S. dollars, down 11 percent from a year
earlier while that in infrastructure, wholesale and retail and services surged.
The acquiring companies
came from 44 countries and regions, with the Virgin Islands taking the lead with
a contractual investment of 1.19 billion U.S. dollars.
Hong
Kong followed with 763 million U.S. dollars and was tailed by Mauritius (188
million U.S. dollars), Cayman Islands (111 million U.S. dollars) and the United
States (92 million U.S. dollars).
Li Zhiqun who heads the MOC's Foreign
Investment Department, said the mergers and acquisitions of local companies by
foreign investors would help the country ascend the global industrial
chain.
"As not many people are acquainted with the real situation of
foreign mergers and acquisitions in China, it's reasonable to see some
departments adopt a cautious approach in dealing with the issue," he
said.
Foreign mergers and acquisitions have been controversial because of
the concern that such deals might jeopardize China's industrial
security.
Statistics from the United Nations Conference on Trade and
Development showed China was the most popular developing country for overseas
capital in 2006 and was fourth in the world in attracting foreign investment,
after the United States, the United Kingdom and France.
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