October 26th, 2011
Chinese investment in North America is on the rise. Entrepreneurs and CEOs have become aware of this in the past number of years in the residential real estate market for the most part but are starting to see more and more corporate transactions.
Further, while many business managers are familiar with China’s potential as a vast market for goods and services, relatively fewer seem to have caught on to the notion that the Chinese are aggressively looking for investments and acquisitions across virtually all business sectors.
Canada saw a total of 3,000 transactions with Chinese buyers and investors with Canadian companies in 2010, according to Money Magazine. Those deals were worth $155 billion, with annual volumes rising 30 percent from 2009.
Chinese firms invested primarily in the energy, materials and financial sectors, but Chinese investors are looking for opportunities in all kinds of industries. For Chinese buyers and investors, North American companies often offer great value in terms of technological capabilities, skilled management and new platforms to reach global customers.
Yuen Pau Woo, President of the Vancouver-based Asia Pacific Foundation of Canada, told the Globe and Mail that “My feeling is that this is the next wave of Chinese outward investment.” A $179 million deal for Sichuan Bohong Industry Co. Ltd. to acquire Wescast Industries Inc., a major producer of exhaust manifolds, was just announced in September. “This particular deal could signal further interest from Chinese enterprises looking for opportunities in Canada.”
How does a company take advantage of these growing opportunities from Chinese investors? Relationships are critical. If success in business is about whom you know, that maxim is far truer when you’re talking about China.
Over the past 15 years, we have developed relationships with many individuals, corporations and groups in China that are potential buyers or investors. These contacts can also serve to assist our clients in penetrating Asian markets with respect to product or service commercialization. Finally, we’ve helped many companies raise capital at all stages in their life cycles by drawing on our relationships with Chinese investors.