China’s outbound investment totalled US$5.65 billion in the first 11 months of this year

China is intensifying its role as a global investor for the second year.

The number was three times the investment made last year from January to November. But due to PC maker Lenovo’s acquisition of IBM last December, the total outbound investment for 2004 leapt to US$5.5 billion, jumping 93 per cent from the year before.

A statement released yesterday by the Ministry of Commerce reported China, long a hot-spot for global investment, is emerging as a global investor itself.

Although the outbound investment is still small compared to the country’s inward foreign direct investment (FDI) of US$53 billion, China is steadily increasing its investment in the world, the official said.

The information and telecoms industries, mining and manufacturing sectors attracted the most investment from Chinese companies, with combined investment totalling 90 per cent of the January to November figure.

Asia remains the largest destination for Chinese investment, accounting for two-thirds of the investment in the first 11 months of 2005.

But investment in North America, Africa and Oceania are increasing quickly, with all destinations registering a year-on-year growth of more than 80 per cent.

Investment cases with a US$10 million value represent more than 60 per cent of the total outbound investment from January to November.

In fact, compared with small and medium-sized counterparts, large-scale Chinese companies are showing a stronger intention to start or increase overseas investments in the future, according to an earlier survey by the China Council for the Promotion of International Trade (CCPIT).

About 23 per cent of surveyed companies intend to increase outward investment, either substantially or moderately, within the next 12 months.

The survey revealed this figure will increase to over 40 per cent in two to five years.

Sun Bosheng, a foreign investment researcher from the Chinese Academy of International Trade and Economic Co-operation, said the Chinese Government is strengthening its guidance on outward investment.

It is simplifying application procedures and improving its services for outward investment information, Sun said.

The Ministry of Commerce set up a reporting mechanism on companies’ overseas mergers and acquisitions in May to offer more assistance.

Once informed of merger intentions, the ministry provides information including the policies, regulations and investment environment of the target countries.

Meanwhile, according to the Ministry of Commerce, Chinese contractors signed more than US$25 billion worth of overseas projects from January to November, a 20 per cent increase from last year.

- China Daily

Inbound Acquisitions: Joint Event with CIIMC and NDRC International Cooperation Centre

11:30 AM - 2 PM, January 19, 2006, American Club, 28F

This will be a good opportunity not only to learn about issues at hand, but also to network with Chinese companies and leaders that have confirmed to attend this event, such as various leaders from NDRC, SASAC, CIIMC members (China International Promotion Association for Multinational Corporations) and the Nanjing New and High Technology Industry Development Zone Group of the Nanjing Municipal Government.

Inbound foreign acquisitions in China reached some $18 billion in 2004, triple the average level for the previous three years and about 30% of total FDI, with more than 300 deals reported. Yet despite all of this activity and forecasted growth for long term, 70-80% of M&A negotiations fail to reach closure, while only one in four deals are successfully concluded, according to the major accounting and law firms that perform the due diligence and write the contracts. This panel discussion, as a first part of an AmCham-China two-part series on M&A, will look at the issues challenging a foreign company that wants to acquire a Chinese company.

PANELISTS

• Deputy Director of Comprehensive Administration Department Information Center, NDRC (National Development and Reform Commission), Pu Yufei
• Deputy Director General, Research Office of SASAC (State Owned Assets Supervision and Administration Commission of the State Council), Peng Hua Gang
• “Getting to the deal, a project manager’s perspective”, Kim Woodard, Chairman, Javelin Investments
• “Due Diligence issues in M&A transactions”, Edward Gwinn, former CFO of Michelin in China currently President of DEG Global
• “Tax trends involving M&A”, Larry Sussman, Partner, O’Melveny and Myers LLP (OMM)
• The moderator for the program will be James Zimmerman, Vice Chair, AmCham, and parner with the law firm of Squire, Sanders & Dempsey L.L.P., Beijing

PROGRAM
11:30 –12 Noon Registration and start of lunch
12 – 2 PM Panel discussion and Q and A

Registration
The fee for this event is RMB250 for AmCham cardholders or RMB350 for non-members. Please confirm your attendance via email ( amchamevent@amcham-china.org.cn ) or fax (8519-1910), by noon on 18 January. As events often have space limitations, please RSVP early. There is also a new online payment option available, please follow instructions when enrolling online.

January 19, 2006
American Club
Beijing, China
Edward Gwinn, former CFO of Michelin in China and currently the President of DE Global will be speaking at the AmCham-China event “Trends and Lessons Learned on Merger and Acquisitions in China,” to be held January 19 at the American Club, Beijing.
Inbound foreign acquisitions in China reached some $18 billion in 2004. Despite all of this activity and forecasted growth in the long term, 70 - 80 percent of M&A negotiations fail to reach closure, and only one in four deals are successfully concluded. This panel discussion will look at the issues challenging a foreign company that wants to acquire a Chinese company.
Gwinn will speak on “Due Diligence issues in M&A transactions.”  Joining him on the panel are Larry Sussman, Partner, O’Melveny and Myers LLP (OMM), Pu Yufei, Deputy Director of Comprehensive Administration Department Information Center, National Development and Reform Commission; Peng Hua Gang, Deputy Director General, Research Office of State Owned Assets Supervision and Administration Commission of the State Council; and Kim Woodard, Chairman, Javelin Investments.

from more than 100 candidates in the Yangtze River Delta

Twelve cities and counties were voted as the best locations for investors out of more than 100 candidates in the Yangtze River Delta, the most developed area of China, Oriental Morning Post reported today.

The 12 locations are Jiangyin City, Changshu City, Wujiang City, Rugao City, Lishui County, Xinyi City in Jiangsu Province, Shaoxing County, Haining City, Pinghu City, Fuyang City, Leqing City, Anji County in Zhejiang Province.

The National Statistics Bureau announced recently that Jiangyin City ranked third in the top 100 counties nationwide, the second time that Jiangyin ranked the top three.

Jiangyin has made major progresses recently, not only within economic development and people’s living standards but urban construction and exposure to the outside world have also been on the rise. Scientific innovation and research have also improved markedly in recent years.

Changshu enjoys the advantage of being adjacent to Shanghai, the economic center of China, and other big cities such as Suzhou, Wuxi and Nantong. Its private companies play an important role in the economic development.

Wujiang City is famous for its silk, as well as the electronic industry now.

The Yangtze River Delta has advantages in location, infrastructure, economic scale and human resources, which are crucial for trade and investment.

- Shanghai Daily

China’s family planning policy on the mainland will be maintained over the coming years, a senior official said on Friday in Beijing.

Zhang Weiqing, minister of the State Commission of Population and Family Planning, said it was long-term State policy to stabilize the present low-level birth rate and that it would be strictly implemented in the nation’s 11th Five-Year Plan (2006-10) and beyond.

Speaking at a national conference on family planning, he refuted rumours which said that China will loosen the present policy and allow all couples to have a second child.

Some experts claimed that Shanghai, China’s most economically developed city, would allow people to have a second child in 2016, the Shanghai-based Dongfang Morning Post previously reported.

But any adjustment of the birth policy must be carried out by the State Council the central government, and local governments had no rights to make changes, Zhang said.

He added the policy was being maintained as the population was still quickly increasing, posing a great burden to the country’s economic development, environment and resources.

Under the current birth rate, the population of China, which has the world’s biggest population, is expected to reach 1.37 billion by 2010, 1.46 billion by 2020 and 1.5 billion by 2033.

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