Chinese overseas investments could expand fast

Agence France Presse

Paris, January 16:

The acquisition of the French perfume and cosmetics group Marionnaud by AS Watson, a company owned by the Hong Kong magnate Li Ka-shing, is another indication of how Chinese investors are expanding abroad.

Until recently, China was considered a developing country, and initial international investments tended to be aimed at securing natural materials, in particular in Australian and South American mines. Purely commercial international ventures are relatively recent on the part of groups based in mainland China, going back around four to five years, though investors in Hong Kong have been active for some time. The newer breed of entrepreneurs, like Russians a few years ago, “are still rather rare, but the speed with which they got on the path to international investing is striking,” said Bernard Yvetot, project director at the French Agency for International Investments (AFII). “They have moved faster than those in Taiwan or the Koreans, who nonetheless make decisions quickly.” Yvetot said Chinese investors ‘have a relatively opportunistic investment approach’.

One reason they can make up their minds quickly is that the companies are often family-based, with a boss who can decide rapidly surrounded by younger managers trained in Western methods, he added. Though most Chinese investments are made in Asia, it is worth noting that those in Westerns tend to be evenly divided between the United States and Europe. Since many of the earliest ventures passed via companies in Hong Kong, Britain has been the primary benefactor, with around 150 major investments. France has around 80, of which half are often more representative offices rather than factories.