China'S M & A Activities Attract Global Attention

The US media said that the increase in M & A from China triggered a discussion about the frequent or frequent trend of M & A activities in Chinese enterprises.

The author thinks there are five reasons for the latter.

First, market diversification.

Although China's economic growth rate is still far higher than the global average of 3%, the gap is narrowing.

Therefore, many Chinese enterprises believe that it is a good time to go abroad to buy and realize market diversification.

Two, government concessions

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The Chinese government hopes that its enterprises will "go out" and actively encourage them to become the world's leading enterprises through mergers and acquisitions.

China has also introduced specific measures to facilitate overseas mergers and acquisitions.

Three.

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Now, China does not want to export tennis shoes to the world again, but wants to sell high-tech products.

To this end, Chinese enterprises take overseas mergers and acquisitions as a way to acquire the required know-how and knowledge.

Four. Get hard

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The pressure faced by the renminbi in the future is mainly downward.

With the RMB being included in the IMF's basket of currencies, the renminbi was on the road of free convertibility before 2020.

With the possibility of further weakening of China's currency in the future, enterprises are seeking to obtain income and profit streams from US dollars and other hard currency through overseas mergers and acquisitions.

Five, beneficial to stock prices.

Overseas mergers and acquisitions have increased the share price of Chinese companies, and many times, the increase in the market value of the company is out of proportion to the relative value of Target Corp.

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In recent years, China's economy has been generally stable and its growth momentum has improved significantly. The import volume of iron ore, copper ore sand, logs and sawn timber and rubber and other industrial raw materials in October has increased by 7%, 29.5%, 22.6% and 10.2% respectively.

For example, with the state encouraging the qualified private oil processing enterprises to import and process crude oil, China's crude oil imports continued to increase at the end of last year, and the growth rate remained at a high level of 9.2% in October this year.

Again, at the beginning of this year, China explicitly called for the task of "going to capacity" in the two major industries of coal and steel, which promoted the increase of the two commodity prices and increased the import volume. The coal import volume increased by 54.5% in October, a high level in recent years. The steel imports increased 13.2% during the same period, which is also a concrete manifestation of the work of "de production".

In addition, the demand of Chinese consumers for imported consumer goods is increasing day by day. The import volume of consumer goods such as automobiles, fruits, cosmetics, dairy products and pharmaceuticals increased by 3.2%, 5.2%, 20.1%, 14% and 10% respectively in October.

The author preliminarily estimated that the import volume of the above commodities increased significantly, which led to a 2.2 percentage point increase in China's import value over the same period.

In fact, China has always attached importance to strengthening and expanding imports and implementing a positive import promotion strategy. Especially in recent years, China's domestic economic development has entered a new normal, and its industrial structure and consumption have been escalating. In order to increase effective supply, meet domestic production and living needs, improve product quality, promote entrepreneurial innovation and optimize and upgrade the economic structure, the state has been promoting the import of advanced technology equipment and key components and reasonably increasing the import of general consumer goods while stabilizing the import of resources products.

According to the quarterly data released by the World Trade Organization in September, the import volume of China's goods trade increased by 10.5% in the two quarter of this year, while the global import volume of goods trade increased by only 3.5% during the same period, of which the US and the European Union increased by 4.6% and 2.7%, while Japan dropped by 5.5%.

Therefore, for China, strengthening and expanding imports is not only conducive to making good use of foreign exchange reserves, promoting balance of payments, but also enhancing the level of openness and cooperation with trade partners, reflecting China's great contribution to Global trade.