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Chinese enterprises acquire 91 overseas companies in 2016

Statistics from Wind Information show that 91 overseas acquisitions were carried out by Chinese enterprises in 2016, with a value of over 160 billion RMB ($23.2 billion). Compared with the same figure in 2015, the number of overseas mergers and acquisitions (M&A) cases in 2016 dropped by 37 percent. However, the total value of such cases increased by 67.6 billion RMB.

The value of 40 cases totaled 100 million RMB, most of which were in fields like machinery, metal and equipment. Air travel was also a popular industry. Analysts believe that the integration of global resources, as well as access to scarce resources in industrial chains, were the main factors in enterprises' interest in overseas M&A.

Implementing a strategy of outward foreign direct investment is more than just an urgent need when it comes to boosting domestic development under the new economic normal. In addition, it is part of China's long-term demand to participate in economic globalization, take initiative in global economic governance and share the outcomes of both, said Wang Xiaohong, deputy director of the Department of Information under the China Center for International Economic Exchanges (CCIEE). Wang said that overseas M&A have become an important method for enterprises to acquire high-end resources around the globe.

Wang noted that 96 percent of the enterprises expanded their overseas market share upon the completion of their respective acquisitions. What's more, 89 percent established research and development centers in Europe and the U.S., and 51 percent enhanced their international influence.

However, Wang believes that the enterprises also face increasing risk, noting that these companies should pay close attention to issues such as debt, overseas operations and capital outflow. In addition, she suggested that the government maintain stricter supervision over the authenticity, feasibility and security of overseas M&A cases.

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