The Chinese government has mixed feelings
about Chinese companies acquiring foreign assets, according to
an October 19 media roundtable on Chinese outbound real estate
investment run by Paul Hastings in Hong Kong.
Indeed, China outbound investment may have
set new records this year with $17 billion spent during the
first five months of the year, but the
government’s inconsistent policy towards promoting
Chinese outbound acquisitions could have stemmed the rapid
outflow of capital.
Speaking at the roundtable,
Paul Guan, partner at Paul Hastings in Hong Kong, said that
Chinese authorities have been stuck in a dilemma between
encouraging large insurance companies and state-owned
enterprises (SOEs) to invest abroad, and preventing an
excessive outflow of capital.
With the continued depreciation of the Chinese currency in
the past year, many large enterprises’ outbound
acquisitions have contributed to a reduction in the
country’s foreign exchange reserves. This has
largely been due...