Outbound ventures

Updated: 2014-02-21 08:29

By Andrew Moody (China Daily Europe)

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Now, however, companies are looking to invest in research and development and also looking to take advantage of China's fast-growing consumer market.

Chng at AT Kearney says FDI into China might be about to undergo some radical transition.

"I think foreign investment over the next 10 years is not going to come to China because of the labor costs since they are already more expensive than most parts of Asia.

"I think you are going to see quite a lot of research and development investment because of the huge talent pool that now exists in China. Companies will set up their Asia research and development facilities in China and on the back of this research sell into the vast China market. Whether FDI goes up, down or sideways also depends to what extent the China economy opens up to new sectors."

Loesekrug-Pietri at A Capital says many companies in Europe and elsewhere are happy to receive investment from Chinese companies since they believe it will give them access to the Chinese market.

His company advised Fosun International, China's largest private conglomerate, on acquiring a 7 percent stake in Club Med in 2010. The Shanghai-based company is now looking to take full control of Axa Private Capital subject to a Paris court ruling expected this month.

"The big thing with Club Med was that it was not just about getting Chinese tourists to go to Chinese resorts in Guilin or Yabuli but about them going to resorts in Bali, Mauritius and Cancun and capturing the Chinese market worldwide. This is why companies now want to align themselves to Chinese companies to reach the Chinese consumer globally."

Cheng at CHG and also author of On Equal Terms: Redefining China's Relationship With the West, says that although he expects a sharp increase in Chinese ODI he does not believe it will be a prelude to Chinese corporates taking over the world.

"I don't think Chinese multinationals will within the foreseeable future, at least, have the same dominance American multinationals have had over the past few decades. They will be a force to be reckoned with but I think it will be more a balancing act with other players."


Outbound ventures

Paul M Cheng, chairman of Hong Kong-based private equity concern China High Growth. Edmond Tang

Outbound ventures

Andre Loesekrug-Pietri, founder and managing partner, A Capital. Provided to China Daily

Outbound ventures

Klaus Meyer, professor of strategy and international business at CEIBS. Provided to China Daily

Outbound ventures

Johnson Chng, managing partner of AT Kearney. Provided to China Daily

Outbound ventures

Pelham Smithers, managing director and founder of Pelham Smithers Associates. Provided to China Daily

( China Daily European Weekly 02/21/2014 page1)

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