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Foreign Enterprises Speed up Merger with Chinese Counterparts Prior to WTO Entry  
THU, NOV 08, 2001
With China's impending accession to the World Trade Organization (WTO), many renowned multinational corporations have hastened their mergers with Chinese enterprises to take advantage of more business opportunities.

The latest is Alcalel-cit world famous telecommunications equipment provider which has become the second biggest shareholder in the Shanghai Belling Company Limited by holding the majority of shares in the Shanghai Bell Telephone Equipment Manufacturing Co. Ltd.

Alcalel-cit now holds 51 percent of Shanghai Bell's shares compared with its former 31.65 percent. According to Tuesday's China Business Times, Shanghai Belling Company Limited is expected to become a major production base of Alcalel-cit throughout the world.

There are also reports about mergers and cooperation between many listed Chinese companies such as Tsinghua Tongfang Company Limited and China Petro-chemical Corp., and foreign enterprises, according to the newspaper.

Experts point out that over 20 years of development, Chinese enterprises, especially labor-intensive enterprises including household electric appliances, have made marked progress in terms of production capacity and management of product quality. Such progress brings the essential conditions for transnational incorporate combination, they add.

Shanghai Property Rights Trading Center registered a transaction volume of 1.966 billion yuan (236 million U.S. dollars) involving foreign mergers last year, 29.25 times higher than in 1996, according to statistics.

Transnational incorporate combination has become a major trend of international investment, according to a report of a relevant U.N. organization on the global investment situation in 2000, which says that the amount of money involved in transnational incorporate combination worldwide accounted for 69.7 percent of the global transnational direct investment in 1995, with the ratiorising to 83.2 percent in 1999.

A survey, carried out by a major United States consultation firm in February, shows that 30 percent of the surveyed senior executives of 1,000 large corporations held that many developing countries including China have become the top choices of foreign enterprises in terms of investment and in conducting incorporate combination.

Experts say, transnational incorporate combination has, at the same time, created opportunities for Chinese enterprises to investoverseas and to make use of global resources.

In June this year, the Haier Group Co., a giant electronic appliance manufacturer in Qingdao, east China's Shandong Province,bought a refrigerator plant of Italy.

Combination between Chinese enterprises rose over the last few years.

Authoritative statistics show that in 2000, more than 500 casesinvolving the combination of listed Chinese firms were reported on the Chinese mainland.

Experts say that incorporate combination will help improve the competitiveness of Chinese enterprises on the international market.


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