BEIJING — Inbound investment via mergers and acquisitions (M&A) in China is expected to reach $1.5 trillion over the next 10 years, according to a recent report.
The projected investment inflow is more than triple the level of the previous 10 years, as new laws including the updated negative list and the foreign investment law liberalize investment in key sectors such as financial services and automotive industries, according to the latest report from global law firm Linklaters.
China’s national legislature passed the foreign investment law on March 15, aiming to create a better business environment for overseas investors.
Charles Jacobs, the senior partner and chairman of Linklaters, said the foreign investment law was a law that sought to protect the rights of foreign investors and their intellectual property, and would clearly incentivize them to invest in China and, in partnership, help Chinese companies move up the value chain.
“We are glad to see that China has decided to adopt a series of significant new measures with regards to opening-up its economy. These measures include broadening market access, enhancing alignment with international economic and trade rules, strengthening protection of intellectual property rights and lowering imports tariffs,” Jacobs said.
The evolving nature of China’s consumer economy and the desire for Chinese industry to continue to progress up the value chain are two particularly important drivers of economic opportunity, according to the report.
Linklaters pointed out that there is scope for foreign investors to take various M&A and investment approaches due to factors such as the increasingly wide range of participants and potential partners in sectors such as automotive and financial services, as well as the potential for capital market participation through the country’s stock connect schemes.