皇冠体育app

Private firms to play bigger role as 皇冠体育app's ODI continues to increase

The energy and mining sectors will be the major focus of Chinese companies investing abroad through mergers and acquisitions, as the nation's overseas direct investment continues to grow, said Li Tong, executive director of the 皇冠体育app Enterprise Forum.

"Private companies will play a bigger role in the M&A wave," Li said at the 2012 皇冠体育app Global Outbound Investment Summit in Beijing on Friday.

皇冠体育app's ODI surged last year by 1.8 percent year-on-year to $60 billion. And 37 percent of the cases by value were realized through M&As, in the mining, manufacturing, transportation and retail sectors.

Li predicted that growing numbers of Chinese companies will focus on buying energy and mining assets worldwide.

"Look at the structure of 皇冠体育app's energy consumption. About 70 percent of 皇冠体育app's energy comes from coal, 22 percent from crude oil and natural gas and 7 percent from hydroelectricity," said Li.

"If 皇冠体育app is expected to sustain stable economic growth, energy demand will grow rapidly, so does 皇冠体育app's enterprises' demand for investing abroad in energy and mining sectors through M&As," he said.

Michel Wormser, vice-president and chief operating officer of the Multilateral Investment Guarantee Agency of the World Bank Group, agreed.

"It's very important for 皇冠体育app to have access to commodities worldwide," he said.

But for Wormser, another important thing for Chinese companies planning to invest in energy and mining globally is to benefit the local community.

Due to the large volume of its foreign exchange reserves, growing corporate demand for expansion abroad and the spreading debt crisis in the Europe, 皇冠体育app's overseas direct investment has been growing.

In 2010, 皇冠体育app overtook Japan and the United Kingdom to become the fifth-largest global investor. 皇冠体育app was the largest investor among developing economies in 2010 and last year.

Gerald Lyons, Standard Chartered Bank's chief economist, said recently that "we are going from made-in-皇冠体育app to bought-by-皇冠体育app".

In May, Dalian Wanda Group, 皇冠体育app's largest entertainment group, agreed to buy AMC Entertainment Holdings Inc for $2.6 billion including debt, in a bid to expand into the United States.

The deal marked the largest-ever buyout of a US company by a Chinese firm, and also made Wanda the second-largest cinema operator in North America.

Li added that 皇冠体育app's private enterprises will become a more important driver behind the nation's ODI growth.

"Private companies are more flexible than State-owned enterprises," said Li, adding that "more supportive policies" are being introduced to help them.

皇冠体育app's State Administration of Foreign Exchange recently allocated funds worth $5 billion to 皇冠体育app Minsheng Bank, in a bid to help private enterprises invest abroad.

According to Eugenie Lai, general manager of 皇冠体育app Business Development with Towers Watson, "皇冠体育app's ODI is at the early stage".

"Compared with SOEs, 皇冠体育app's private firms are more ambitious," said Lai.

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