China's Expanding Role in Global Mergers and Acquisitions Markets

China's Expanding Role in Global Mergers and Acquisitions Markets

China's Expanding Role in Global Mergers and Acquisitions Markets

China's Expanding Role in Global Mergers and Acquisitions Markets

Excerpt

During the coming decade, China will play an increasingly influential role in global capital markets. This role will be powered by large and sustained surpluses in China’s current accounts—that is, the excess of China’s earnings over its payments in international transactions. Some of these surpluses will be invested in acquiring ownership or partial ownership of foreign companies and other assets, including some in the United States. It is timely and important for U.S. analysts to understand the underlying strategy and the attendant consequences— both favorable and unfavorable—that may be associated with these investments.

The research described in this monograph analyzed recent and proposed Chinese investments in U.S. companies, including both acquisitions that were completed and ones that were disallowed or withdrawn. The research also reviewed China’s recent and prospective investments in companies in Europe, Asia, and the rest of the world. The aim of this review was to gain an understanding of China’s investment patterns and to develop a methodology to improve the assessment of whether proposed investments should be allowed or should require measures to mitigate risk. Data used in the monograph cover the decade through 2009, with occasional references to 2010. Many of the trends and forecasts drawn from these data have been reinforced by more recent data.

This research was conducted within the RAND Center for Asia Pacific Policy, part of International Programs at the RAND Corporation. The center aims to improve public policy by providing deci-

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