Global Players from Emerging Markets: Strengthening ... - Unctad

56 Outward Foreign Direct Investment by Enterprises from China
Table 5. Top 20 Chinese overseas investors, by overseas corporate assets, 2003
Rank Company name Rank Company name
1 China Mobile 11 China Merchants Group
2 China Petroleum Chemical Industry 12 China Construction Engineering
Corporation
3 China Joint Communications Co. 13 China International Trust & Investment
Co.
4 China Shipping 14 Hong Kong China Tourism
(Corporation) Ltd.
5 China Ocean Petroleum 15 China National Chemicals Import and
Export Group
6 China Petroleum & Natural Gas 16 China Petroleum Chemical Industry
7 Guangdong Macau-Hong Kong Investment
Holding Co. Ltd
8 Shanghai Enterprise (Corporation) Ltd. 18 China Electric
new markets (including sales expansion and jumping
trade barriers), securing natural resources and
obtaining advanced technology and brand activity. 33 A
survey conducted on behalf of the Foreign Investment
Advisory Service (FIAS) of the World Bank confirms
these motives and their rank order of importance. 34 In
addition, other motives, especially efficiency-seeking
are mentioned; but interestingly efficiency-seeking
is far less a reason for FDI by Chinese TNCs than
other Asian TNCs, for whom this motive is often the
primary one. Apart from this, the motives of Chinese
TNCs are broadly similar to other developing country
TNCs. 35
Nearly half of the respondents in the Roland
Berger report indicated a preference for greenfield
investments overseas, followed by strategic alliances.
Few indicated acquisitions as their preferred mode for
foreign market entry strategy. This is again confirmed
by the FIAS study, where M&As represented
only 15 per cent of all affiliates established by the
responding companies. M&A activity by developing
country TNCs is volatile, but the Chinese proportion
33 8 per cent of companies gave other reasons, but these are not
detailed in the report.
34 Yang and Yin, op. cit.
35 UNCTAD 2006, op. cit.
17 Jing Oriental Science and Technology
Corporation (Holding Co. Ltd.)
9 China National Cereals, Oils & Foodstuffs
Import and Export Corp.
19 China Marine Shipping (Group) Co.
10 Guang Zhou Yue Xiue Corp. 20 China Minmetals Corporation
Source: China, Ministry of Commerce.
is certainly proportionally smaller than M&A activity
by some other developing economies, e.g. Hong Kong
(China), Singapore and Dubai. 36
About 70 per cent of all Chinese M&As
made during 1995-2003 were concentrated in five
economies (the United States, Australia, Hong Kong
(China), Indonesia and Singapore) (table 6). This
represents both opportunity and the nature of the
companies acquired. The biggest concentrations
of acquisitions during the same period were in oil
and gas-related, manufacturing activity, electronic/
electrical products, trade and communication, various
business services and financial services (table 7). In
even sharper relief, 11 of the largest acquisitions by
Chinese TNCs were in petroleum, petrochemicals
and related products, five were in electronics/electrical
products and three were in communications (table 8).
While these data probably underplay the extent of
OFDI in other industries, possibly with a different
profile of motives, nevertheless they do confirm the
importance of the three sets of motives mentioned
earlier: finding new markets, securing resources, and
accessing technology, brands and other assets.
36 UNCTAD 2006, op. cit.