Chinese companies more wary of foreign investments

Chinese companies are becoming reluctant to make foreign acquisitions and favoring partnerships and alliances over outright buyouts, reported state media, citing an Economist Intelligence Unit report. Of survey respondents definitely considering foreign investments, 47% would prefer joint ventures while only 27% would consider complete acquisitions. Chinese companies completed 298 cross-border acquisitions in 2009, frequently investing in struggling foreign enterprises unable to find any other buyers, but negative foreign reaction has complicated previous transactions. Consequently, Chinese companies may now prefer to make minority investments in a wide range of companies that nevertheless offer access to intellectual property and a potential foothold from which to make later outright acquisitions.