On the receiving end of Chinese outbound investment

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clpstaff &clp articles

Chinese private companies and state-owned enterprises are on the lookout for assets and may provide hope for distressed companies overseas. Target companies should do all they can to help

Phil Taylor

Chinese outbound investment seems to be getting all the attention at the moment. There is no doubt that both private and state-owned PRC enterprises are becoming increasingly active in looking overseas for assets and strategic investment opportunities. But Chinese companies have a lot to learn about adapting to overseas practices, laws and regulations. And at home, they face significant challenges to overcome before their acquisitions can be finalised.

In China, outbound investments must be approved by the National Development and Reform Commission (NDRC) at state or provincial level. Signoff is also needed from the Ministry of Commerce (Mofcom) and State Administration of Foreign Exchange (Safe); if a state-owned company is involved, the State-owned Assets Supervisory and Administration Commission (Sasac) must also give approval.

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