China’s foreign investment strategy is rooted in resources
The need for raw materials still trumps energy in the Middle Kingdom
Despite concerns about an economic slowdown and inflation, mainland Chinese investment in foreign lands has not abated according to a new report on China’s mergers and acquisition (M&A) activity released by PricewaterhouseCoopers. Chinese outbound M&A activity increased by 14 per cent in the first half of 2011 compared to the same period in 2010. And while much has been made of China’s thirst for oil and gas, 52 per cent of the deals made so far in 2011 were for raw materials and industrials. Only nine per cent were related to energy and power. North America remains a favorite destination for Chinese investment, but the continent is not as popular as Europe and Asia. As for Canada, it was the fifth-most popular nation for Chinese investment, representing an 11 per cent outbound deal volume, up from nine per cent during the first half of 2010. Not surprisingly, the Chinese were interested in Canadian oil, gas, metals and minerals. All of the deals in the first half of this year were concentrated in the raw materials and energy and power industries.