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Capital Agenda of French Companies in China - FDI in 1Q11 - EY - China

Capital Agenda of French Companies in ChinaFDI in 1Q11

Chart 1 | FDI into China


Chart 2 | 2010 FDI by sector


Chart 3 | French FDI from 2008, 2009, 2010, 1Q10 and 1Q11


Chart 4 | China Out-bound M&A Activities during the Past 5 Quarters


FDI remains strong in 1Q11

In 2010, FDI into China surpassed the US$100 billion mark for the first time, making it the second strongest FDI destination after the US. In 1Q11, FDI into China continued its strong momentum.

Chart 1 | FDI into China

Chart 2 | 2010 FDI by sector

Chart 3 | French FDI from 2008, 2009, 2010, 1Q10 and 1Q11

As can be seen from Chart 3, the value of French FDI into China reached an historical high of US$1.24 billion in 2010, reflecting the larger deal size of French FDI – an indication of the opportunities inChina.

In line with the strong FDI in 2010, the value of French FDI in 1Q11 of US$227 million represented a growth of 24% compared to 1Q10.

Outbound investment to surpass FDI


Chart 4 | China Out-bound M&A Activities
during the Past 5 Quarters

The transformation of China’s economic model as well as the Chinese government’s intent to reduce China’s foreign reserves will facilitate overseas investments by Chinese companies. A senior Ministry of Commerce (“MOFCOM”) official was quoted in the press as saying that China’s ODI was expected to grow at an annual rate of 20% to 30% and is expected to overtake FDI within three to five years. In particular, the US, the European Union and Latin America are expected to see a rapid increase in ODI from China.

Accordingly, the outlook for French companies partnering with Chinese companies coming to France has never been more apparent.


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Contacts

Bernard Ng
Transaction Advisory Services
Managing Director, French Clients (China)
Tel: +86 21 2228 2005

Bertrand Regnier
French Business Center, China
Partner
Tel: +86 21 2228 2219

Camille de Guillebon
French Business Center, China
Senior Manager
Tel: +86 21 2228 2293

Bob Partridge
Transaction Advisory Services
Managing Partner, Greater China
Tel: +852 2846 9973

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