On Thursday 5th May, IPWS hosted a panel discussion on the topic ‘Chinese Overseas Investments‘ so we could see what China is doing outside of China… with a great range of experts Richard Ho, Wei Han and Christina Zhang, and moderated by Caroline Pan. During the discussions we came across the following short points:
Overseas Investments have Changed
Before natural resources, Oil & Gas were primary industries for overseas investment, but now the focus has moved onto food safety and new technology and manufacturing in particular and broader consumer industry where there is a value mismatch between their home market and China. Additionally, more and more Chinese consumers travelling abroad who will be more eager to spend money on China owned company when overseas
A “Threat to National Security” is just hype
The concern about national security concerns when Chinese companies are blocked from acquiring overseas is overrated.
What about Integration?
Chinese companies when making acquisition are trying to ‘play nice’. They have learned from previous mistakes and now trying to have a c-suite representative on the management team. It’s challenging to have a Chinese CEO in a publicly listed European company so normally try to have CFO on the management team.
What’s the Hottest Sector?
Healthcare is definitely a hot topic for Investors, with the aim to deliver better products to growing Chinese middle class, who are extremely savvy about quality products, and wanting safe & reliable healthcare items for their families.
A Good Rep Required!
Apart from having capabilities to manage acquired businesses, Chinese investors need to have good reputation overseas to make acquisitions work.
And in the Future?
Chinese market is big enough now but it’s still growing, and there isn’t much attraction at the moment to take Chinese brands overseas. Their brands also tend to be of lower quality and specific for Chinese Consumers, like Xiaomi etc.