Newsletters in the Year of the Rooster (2005)
M&As in China: Opportunity or Hornet’s Nest?
The strategic use of merger and acquisition in the People’s Republic of China has only begun to proliferate in recent years, mainly due to the easing of legal restrictions which had previously acted as a significant roadblock.
Until the beginning of the 1990s, Chinese law did not readily permit foreign investors to invest in other China-based companies, even if they had existing PRC operations in the form of a Foreign Invested Enterprise (FIE). This served to stifle M&A activity and led to foreign investment in China being relatively inefficient. However, during the last decade significant progress has been made and major M&A deals are now commonplace.