Chinese direct investment abroad has been quietly scaling up in recent years. While Chinese state-owned enterprises still account for much of China's outward capital, investment is increasingly coming from medium-sized firms and start-up ventures. Conditions have changed, with Chinese firms becoming more cautious acquirers seeking strategic assets rather than running capital-intensive projects. Targets are increasingly in developed countries, which China is gradually adjusting to through more medium-sized acquisitions.

1. :IR
:!t- ss*wxsN
Baseless fears
Beijing is also aware that lack ofun-
WhiLe others
fret about
China buYing f[l*t*#ltq,l.flf iry
fi. dramatic t
t"Alty, how&er, is less
seen F ,^';J
',ll,ffi]:,.ru:fq'i$*is.x
rrri^"..rlo""icularlyinAfrica,whichin
up the world, and the past year may come to be t f i.;;; resentment - though
Beijing is ;; n.",[, ;; i.a't
i" ihe
'hort l:1T'"f ^l L d'''il;; j, investment has cre-
"i'o
u''
"pp'"'iution
Ct'i""r direct investm."Ll]TjTJi**
l--- g: - ,hu, Chin"re
There are several reas
quietLY scaLing
that tuture *i1i- b. 1",,';ff;;: li: .F'm;, ::*""tt;'i,?.:L[ffiJ^T!::*t
back its ".q,,i,itior,,
hish-profile and in many cases m^ore ';
, -
1., ,
' : '":,:^ --- too much out-
Th"r. is a sense that
ca'otiJurthanintherecentpast'
lhehrst i: ', '' - - ?e' ea **J i.ru.rr*ent has been.driven sim-
activrtY, says b ecaus e
Asia watcher I nilfl ii:'":'*li: il'"Tl iSLH'gro* fur..) [h.fit';il;;"
drive n
.br', li i,r :i'***:tl''g gto*' OfiX'l;::ill the case
;:f:3 course' in national
continues ,o
robust.domestic demand, 'J is a long-term
Phrtip Bowring ort'uL'nt
than most others, sucking in imports i"a ";'1ii1't: '"'ot"tt'i1i"re
intt"'i t"'io"ale - even if there is no necessary
time. foreien
ing commodiry prices. ,{t th. s'ame t"""ttti"" bt*ttn o*t'ership of' say''an Aus-
into ctinu i, titay to,1o.t du.
rliiect investment
to weak exp ort demand ii rh:. I".-,1 # :'1ru I 1,,il','i;,1lit n*li
PotiticaL
o',',]
""
l*:"V.:::::"ntm*I**' to ;n{::l-:m?;:ili3'?XJ:
opl::llion ffi'nl;lueeded'lechnorogl'or
*l*l;;3i;T:TfTJ:'iilJ;;l acquisitions may ause
il11"#;;;,' ."od"' "r ""1."f
in.tf'""-rltnrcapitallarkedi;the be hypOCfitiCat, Ptayinqsafe. take account of
.".t.".u.Af,no,rgi'short-ttrmflows :- ".f f-'' l-:;--i-- b;i"; L"t, ttto
direct in- bUt it iS a feaLity
are not directlv relevant to S,lllt.t opposition to some ac-
t o w h i ch c h i n a i s'q"i'i,J"'j'L'i'"ttlf '.-$i.'fl ;
h't:W*:n'H.?ffiil::ll
'd,fl', ;d;;;;;;'.;;;;;"'' adiusting. Targ.ets f; il:'#".;;;J-r o",iit'" pu*
Heady days no more are incrlasinstv-
is no questiol that state- mediUm-SiZgd Of
:frln:*i*1!ii:irf,'f:t*
rvhich China is al-
There iir'^ t.^fi"'to
owned enterprises (SOF.s) account __ -.--rrrraa
;ffi:;;k;ii;;^r ."pitur *t-
,"advadiusiing.Acquisitiontargets
Etart-up ventures ;:"iJ:;il;ir' -laiu*-,i,.i o,
that tend to draw ;;*m:l'e' 'lhat tend
to draw
l*:*n:ffiffii:i:fi'$:
.i,., *.r. actively sought byWes5 LeSS attgntiOn
ltt'Ul
t*ur.ly, Chinese direct in-
for capi-
k .t".o""t"tp"rts'despJrate
these
t r,it."i*i(always be welcome if
:-- tal iniections. Consequentlv'
Cr'i"l,. pr"r.,iy:* Jj'lii"'ffi'"',' stakes at
ili: Til.*:J;X""tL'Jl"3;iiifiTffJiffii;
F low, or aPParentlY low' ortces' assets awa)'
r Conditions f,uu. ,i.r.. changed,.though.
Li- "il*n'uni " "ttd to diversifl' foreign
*,
n:tt'v*:;:::':T.1ffi ;"**::.';nii"fr-T'?:",ttjfi ]"*q+]"t,'ji"T"Tl'it;I
',: ^l;td*f than run cap-in- a'."av i'"a
gl
:* ';,her ::J:T,:""'if:,'i*ri'"*.'.,'i"ii
iTf;:ril.1,-,jl;i'"il;;' firms are becoming nutnt' and a need.to'build
*i"t-g19u^^r brurrJ
:
For their part, Lhinese
*o,. .,utioo. M,nv''i"il il- p*l 1Y::ii:l
or)
;1'*l*ltm'mf;:iinf fioo' ffit
in. t"ttt to acquire foreign assets' for some
*o..byprestige,r,",'u]ilg#;;ry1s:li;;g;"fru;*;,#-n:#:i:Fl'i"!Fl1'".H
ril
It-t X**'l*;g:nS::i'l'?;.ffi iffi':#fi {i",.,::.#*:lti:hrfi;lu::l,lilxi'i'll
Ifi
Lr''
l;f :: I il'"'ii
;i:,:;ffi *ilT$"'.'^':ti1-ti,L### *;ltrm*l,i:-* s,eadilv, bu,
i""' n^ b'ei ou"-hvped '-
ln:f;l;'*#* l&tlt,lli?i'x11"'?l;:' 'n'
:
2009
Cntna Ecororr'c Review' Decenoer
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