Outbound deals: small is beautiful - Ben Cavender

Ben Cavender

China's financial authorities are cracking down on outbound deals, but not all deals are off-limits, says business analyst Ben Cavender. Especially smaller deals seem to avoid political scrutiny, he tells CNBC.

CNBC:

So far this year, about 70 percent of China's outbound deals have been valued at $1 billion or less, according to Dealogic data. Experts said they expect the trend of smaller acquisitions to continue. 

That's because with larger acquisitions, "you start getting questions on national security ... and overall stability and growth of the Chinese economy, so there's a lot more scrutiny over large, marquee deals," said Benjamin Cavender, principal at consulting firm China Market Research. 

But "when you're talking about small, medium enterprises, there's a little less pressure — the government doesn't see that as having any way to shape the economy, or cause issues with policy," he said.

More at CNBC.

Ben Cavender is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch fons.tuinstra@china-speakers-bureau.comor fill in our speakers' request form.

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2017: Even sharper drop in outbound investments - Shaun Rein

Shaun Rein

At the end of 2016 a sharp decline in outbound investments by China became clear as financial restrictions kicked in. Business analyst Shaun Rein expects the curtailing measures to last for at least six months into 2017, he tells the South China Morning Post.

The South China Morning Post:

Shaun Rein, managing director of China Market Research Group, said he expected outbound investment from China into the United States to drop sharply in the first three to six months of 2017. 

“First, the capital controls are very serious. Right now Chinese companies are hesitant to make an acquisition overseas because they’re worried that they won’t be able to get the approval to convert for foreign exchange. That situation should get better in general as fears of a currency collapse are alleviated,” he said. 

Fears that President Donald Trump may implement trade policies that target China will also weigh on investment, Rein said. 

“Chinese companies and Chinese tourists both are concerned that they won’t feel welcome in the United States any more. They’re scared that Trump will target them and target China,” he said. That, in turn, would boost investment into other markets like Europe and Australia.

More in the South China Morning Post.

Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers´request form.

Are you looking for more political experts at the China Speakers Bureau? Do check out this list.  

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