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Recent Chinese Buyout Activity and the Implications for Global Architecture

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  • Agata Antkiewicz
  • John Whalley

Abstract

We discuss recent cases of Chinese buyout activity in the OECD (especially in the US and the EU) in resource and manufacturing sectors. While most of the buyout attempts have been unsuccessful, they can serve as a catalyst for a wider discussion on the implications for global arrangements over cross border acquisitions. Three specific issues are discussed. The first is the subsidization of purchase raised in the OECD in response to the advancing of low- or no-interest loans by the Chinese Central Bank to companies investing abroad. The second is the transparency of entities involved in the buyout attempt. Most Chinese companies have close ties to the multiple levels of government and are not subject to the standard reporting requirements as required of OECD companies. The third involves national security concerns in the OECD and the possibility of acquiring sensitive technology by Chinese companies when they purchase companies abroad. These issues have not been addressed in the existing OECD/WTO investment policy initiatives and have yet to be discussed in the global fora.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 12072.

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Date of creation: Mar 2006
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Handle: RePEc:nbr:nberwo:12072

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  1. David Wall, 1997. "Outflows of Capital from China," OECD Development Centre Working Papers 123, OECD Publishing.
  2. Cull, Robert & Xu, Lixin Colin, 2003. "Who gets credit? The behavior of bureaucrats and state banks in allocating credit to Chinese state-owned enterprises," Journal of Development Economics, Elsevier, vol. 71(2), pages 533-559, August.
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Cited by:
  1. Nicholas Lardy, 2010. "Comment on "China's Outward Foreign Direct Investment"," NBER Chapters, in: China's Growing Role in World Trade, pages 578-580 National Bureau of Economic Research, Inc.
  2. Anusha Chari & Wenjie Chen & Kathryn M.E. Dominguez, 2009. "Foreign Ownership and Firm Performance: Emerging-Market Acquisitions in the United States," NBER Working Papers 14786, National Bureau of Economic Research, Inc.
  3. Knoerich, Jan, 2010. "Gaining from the global ambitions of emerging economy enterprises: An analysis of the decision to sell a German firm to a Chinese acquirer," Journal of International Management, Elsevier, vol. 16(2), pages 177-191, June.
  4. Clifton, Judith & Díaz-Fuentes, Daniel, 2010. "Is the European Union ready for foreign direct investment from emerging markets?," MPRA Paper 33036, University Library of Munich, Germany.
  5. Iuliana Oana MIHAI, 2012. "Foreign Owned Companies and Financial Performance. A Case Study on Companies Listed on Bucharest Stock Exchange," Economics and Applied Informatics, "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration, issue 1, pages 13-20.
  6. Leonard K. Cheng & Zihui Ma, 2010. "China's Outward Foreign Direct Investment," NBER Chapters, in: China's Growing Role in World Trade, pages 545-578 National Bureau of Economic Research, Inc.

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