Updated – 25 November 2014
# “China’s outbound direct investment is for the first time set to exceed investment into the country, highlighting the ongoing shift of global economic influence to the east.” – FT.com, 22 Oct, 2014 – http://www.ft.com/cms/s/0/28f6b8d4-59cd-11e4-9787-00144feab7de.html#axzz3JzPW4Z3o
# “Chinese enterprises completed a record 176 mergers and acquisitions (M&A) overseas in the first nine months of 2014, up 31 percent year-on-year, according to a report released by accounting firm PwC on Monday.
Among them, private enterprises completed 120 M&A transactions, more than doubling the number carried out by state-owned enterprises and making them the major force in the M&A market, according to the report.” – China Daily, 22 Oct 2014 –http://usa.chinadaily.com.cn/business/2014-10/27/content_18809601.htm
# “The theme of outbound China M&A has changed. State-owned enterprises are no longer the only buyers going overseas, private companies in industries like consumer and technology have started doing high-profile acquisitions on the global stage in recent years,” said Stephen Gore, Asian-Pacific head of mergers and acquisitions at Bank of America Merrill Lynch.” – WSJ, 21 Sept, 2014 – http://online.wsj.com/articles/chinese-overseas-buying-increasingly-shifts-to-private-from-state-1411335001
# There are five kinds of Chinese overseas investments (or at least JVs) – which are not mutually exclusive – in rough order of priority:
- Natural resources: oil and gas serving a growing need:
- Chesapeake Energy – Sinopec(July 2013)
- Wolfcamp shale exploration – stake by Sinochem (Jan 2013)
- Pre-August 2012:
- Oil and gas: (Sinopec, CNOOC and PetroChina have all been very active in several continents, including North America – Nexen, Canada),
- coal, steel, minerals (incl Australia’s Sundance),
- arable land (parts of Africa and South America).
- Infrastructure and other tangibles which are ‘safer’ than holdings of US or Euro bonds and provides relatively predictable yields; they often also provide technology transfer at no additional cost:
- Salov – Bright Foods( Oct 2014)
- Tnuva – Bright Foods( May 2014)
- AMC Entertainment cinemas – Wanda(Sept 2012)
- Weetabix – Bright Foods(May 2012)
- Smithfield Foods – Shuanghui Foods (May 2013)
- Pre-August 2012:
- manufacturing plants (Putzmeister),
- oil refineries (INEOS’ Grangemouth (Scotland) and Lavéra (France),
- utilities (Redes Energeticas Nacionais, Energias de Portugal, Thames Water; Brazilian electricity grid, Northumbrian Water), office blocks (Canary Wharf, London),
- housing in the US;
- construction – Spanish construction company; all sorts in parts of Africa and the Caribbean (sports stadium, holiday resorts, roads, ports, etc).
- Technology: esp new and innovative building for the future:
- Motorola – Lenova (Jan 2014)
- Pre-August 2012:
- UK’s Centre for Integrated Photonics;
- geothermal energy (Iceland);
- Saab (to Chinese-Swedish JV);
- Hawker light aircraft (US);
- A123 Battery (US).
- Brands: especially luxury brands which reduces the outflow of currency and increases the inflow as the population gains affluence and demand for luxury goods continue to expand:
- Waldorf Astoria – Anbang Insurance(June 2014)
- Corum watches – Wanda (April 2014)
- Pre-August 2012:
- yachts (Ferretti),
- high fashion (Cerruti, Sonia Rykiel),
- essentials (Putzmeister);
- soccer (Inter Milan).
- Financial houses, esp owners/managers of funds (BlackRock) – which are not as ‘safe’ as resources and tangibles, but much safer that Euro and $ bonds.
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