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China’s Expanding Role in Global Mergers and Acquisitions Markets

China’s Expanding Role in Global Mergers and Acquisitions Markets

Charles Wolf
Brian G. Chow
Gregory S. Jones
Scott Harold
Copyright Date: 2011
Published by: RAND Corporation
Pages: 68
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  • Book Info
    China’s Expanding Role in Global Mergers and Acquisitions Markets
    Book Description:

    The authors evaluate the risks and benefits of increased Chinese foreign investment, aiming to improve understanding of its investment patterns and strategy. They consider how U.S. national security might be compromised as well as how the United States and China can benefit from such investment, providing a way to assess national security risks and benefits and examining Chinese investment patterns in both the United States and elsewhere.

    eISBN: 978-0-8330-5983-3
    Subjects: Political Science, Economics, History

Table of Contents

  1. Front Matter
    (pp. i-ii)
  2. Preface
    (pp. iii-iv)
  3. Table of Contents
    (pp. v-vi)
  4. Figures and Tables
    (pp. vii-viii)
  5. Summary
    (pp. ix-xviii)
  6. Acknowledgments
    (pp. xix-xx)
  7. Abbreviations
    (pp. xxi-xxii)
  8. CHAPTER ONE Background and Objectives
    (pp. 1-4)

    One of the few propositions on which virtually all China experts—inside as well as outside China—agree is that foreign investmentinChina has been a major contributor to the Chinese economy’s remarkable growth over the past several decades. Between 1992 and 2007, annual foreign investment in China increased sixfold, from $11 billion to $70 billion—a growth that reflected both investment opportunities and their anticipated benefits.¹ In addition to the direct benefits realized from the invested capital itself—whether through joint ventures or equity investment—significant additional benefits accrued indirectly from the technology, management, and marketing that were...

  9. CHAPTER TWO China, the United States, and the Global Economy
    (pp. 5-10)

    In the evolving global economy, China’s large and growing financial resources will strengthen its ability to seek companies and resources abroad. This leverage will predictably encounter resistance for political and security as well as economic reasons. The resulting challenge for both target investment countries and China is how to nurture the opportunities for and potential benefits from efficient allocation of Chinese foreign investments while avoiding or minimizing risks to the national security and other interests of the United States and other recipient countries. The goal of this research is to develop an understanding of these investments and a methodology to...

  10. CHAPTER THREE China’s Recent and Prospective Foreign Investments
    (pp. 11-26)

    China’s foreign investment strategy is distinctive, selective, and flexible. It is distinctive in that it reflects both the central government and ruling party’s broad national priorities that prominently include the salient need of the Chinese economy to sustain high rates of economic growth. The distinctive role of the central government is a consequence of the fact that China’s major foreign capital transactions require approval by the SAB and the SAFE, both of which are accountable to the State Council. When competing claims arise to use China’s foreign investments to help in meeting the demands of the economy, the military, and...

  11. CHAPTER FOUR Assessing Chinese Investments
    (pp. 27-38)

    The preceding chapters have provided background for comparing the magnitudes and sectoral composition of China’s investments in the United States, Europe, Asia, and the rest of the world. In light of this background, we begin this chapter with several observations concerning the broad patterns of China’s foreign investments. This leads to our development of a methodology for evaluating potential new investments to assist in identifying the positive and negative factors that may be associated with these investments.

    First, with the world’s largest holdings of foreign exchange reserves, China has been making foreign investments to advance multiple objectives: maintaining a stable...

  12. CHAPTER FIVE Conclusions, Implications, and Guidelines for Further Research
    (pp. 39-42)

    In his opening remarks to launch the first U.S.-China strategic and economic dialogue on July 27, 2009, President Obama observed:

    The relationship between the United States and China will shape the 21st Century. . . . The United States and China share mutual interests. If we advance those interests through cooperation, our people will benefit. And the world will be better off, because our ability to partner with each other is a pre-requisite for progress on many of the most pressing global challenges.¹

    In the evolving global economy, China’s large and growing financial resources are propelled by having the world’s...

  13. Bibliography
    (pp. 43-46)