CHINA OUTBOUND INVESTMENTS – OUR RESEARCH

History

Our firm's China Outbound Investments product was launched in 2008 with a view of providing  (to the extent possible) "primary source reconciled data" related to Chinese outbound investments. We did so after hearing so many corporate and institutional investors question the transparency or sources of such data appearing in numerous public sources.

We monitor all Chinese outbound investments across countries, industries and by type or component of investment. We exclude from our analysis all defense related or security related investments.  We do not make specific recommendations, either by industry or by sector, rather our objective is to provide solid data which can assist our corporate clients and/or institutional investors in identifying macro trends and to track major shifts in Chinese investment patterns.

 Unique Analysis

Based on our firm's employees experience of nearly 20 years in visiting China, it remains our opinion that a major portion of Chinese outbound investment to date has been and remains government driven. For the past several years, Chinese outbound M&A activity has been dominated by major SOEs. While this pattern is changing, and as average transaction sizes decline to include more private sector outbound activity, SOEs still dominate aggregate values. While our other research competitors track such activity, we bring an investment banking research angle to the product, frequently releasing some of our investment banking research on our website, after releasing it to our clients.

In light of central decision making of the Chinese Government in outbound investments, we also provide data on all Chinese Government related Agreements as well as loans involving SAFE (when disclosed), by China Development Bank and by China Ex-Im Bank. Finally we provide an analysis - not just data, on each major Government led agreement.

One example in 2014 of the inter-linkage of these three components was in Italy. During the period of March through August 2014, SAFE invested €3.2 billion in 6 major Italian companies through share purchases. In October, during Premier Li's visit to Italy, China and Italy signed new agreements with a stated value of $10 billion, of which we calculate $6.2 billion being outbound; $2.3 billion in new loans while another $2.5 billion involved equity investments of Chinese Government entities. There were a number of other 2014 examples of such linkages including Russia.

We know of no other such research product which includes all three components.