Rapid increase reflects growth of cross-border M&A
The Ministry of Commerce (MOFCOM) said on Tuesday that it saw a surge in the number of alleged antitrust cases under investigation during the first three quarters of the year as cooperation between Chinese and overseas companies intensified.
In the first nine months, the MOFCOM received 244 declarations for the concentration of business operators, up 43.5 percent year-on-year, Shen Danyang, a spokesman for the MOFCOM, said at a press meeting.
There were 247 cases in the first three quarters under antitrust probes, an increase of 49.7 percent year-on-year, and the number of cases settled grew 42.2 percent to 236, according to the ministry. Both foreign and domestic firms were involved.
Shen explained that the sharp growth was in line with the increase in mergers and acquisitions (M&A) in the past two years.
Either in terms of China's outbound investment or with respect to foreign investment, a very special phenomenon is that a great many M&A deals took place, he said.
Data from the MOFCOM showed that 1,016 foreign-invested companies in China were set up via M&A deals during the January-September period, an increase of 16.5 percent from a year earlier, attracting $15.29 billion from foreign investors, up 204.5 percent.
A report in February based on a survey of 447 members conducted by the American Chamber of Commerce in China showed that 61 percent of the respondents expected that the revenue of their China operations would continue growing in 2015 from the previous year, and 69 percent had plans to increase investment in China during the current year.
Zhou Liujun, director-general of the Department of Trade in Services and Commercial Services of the MOFCOM, stressed at the meeting the active role M&A deals have played in China's outbound investment.
"M&As are major ways for Chinese companies to go abroad," Jin Rui, a foreign investment analyst with the Chinese Academy of International Trade and Economic Cooperation, told the Global Times on Tuesday.
Companies from various sectors, especially private ones, are willing to cooperate with their foreign peers to take advantage of the latter group's advanced technology, said Jin.
In August, Dalian Wanda Group Co, one of the leading Chinese private conglomerates, reached an agreement to acquire the World Triathlon Corp for $650 million.
Jin's assessment was supported by Zhang Lei, a Beijing-based macroeconomic analyst with Minsheng Securities.
"M&As, mainly concentrated in equipment manufacturing and the financial and IT sectors, will continue to be a trend for a while, effectively saving costs for companies that want to grow bigger and faster during the global economic slowdown," Zhang told the Global Times on Tuesday.
Zhang expected a new wave of M&A deals linking Chinese and foreign companies in the fourth quarter following President Xi Jinping's state visits to the U.S. and UK.
