China outbound M&A grew rapidly in 2008 and the first
quarter of 2009. According to the Ministry of Commerce
(Mofcom), China made overseas direct investment of $52.15
billion in 2008, rising sharply from $26.51 billion in 2007.
More than 42 outbound M&A transactions were conducted by
Chinese companies in 2008, including some very big and
important for their sector.
But outbound M&A can be slow. Although it has government
support, it is subject to strict control. This is driven by
China's long-standing foreign exchange control and regulatory
supervision over domestic capital. Generally, outbound M&A
must obtain approval from the National Development and Reform
Commission (NDRC), Mofcom and the State Administration of
Foreign Exchange (Safe). In addition, if an overseas
acquisition involves state-owned companies, approval is also
required from the State Asset Supervision and Administration
Depending on the nature of the Chinese acquirer,...