Thread: Chinese Companies on Pace to Invest $30 Billion in US This Year

Where the fleeing Chinese millionaires go ...

Sure, we are told they are "putting money into the economy." Yeah right. They are only doing this because they have some connections back in China that they expect to benefit from their US investments. This will perpetuate the stranglehold China is seeking to establish in world markets. The United States is turning into the biggest group of suckers in the world.

China, Canada firms sign 56 deals worth more than $1.2 Billion

Canada to open seven new visa centres in China to attract more tourists

Thomson Reuters Posted: Sep 01, 2016 9:01 AM ET Last Updated: Sep 01, 2016 2:47 PM ET

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• Canadian Prime Minister Justin Trudeau delivers the keynote address to the Canadian Chamber of Commerce in Hong Kong luncheon in Hong Kong, Tuesday, Sept. 6, 2016. (THE CANADIAN PRESS/Adrian Wyld)

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Chinese and Canadian firms signed 56 deals worth more than $1.2 billion at a ceremony on Thursday, Canadian Trade Minister Chrystia Freeland said in Shanghai.

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Freeland said Canada could be a great partner for China, but Ottawa officials are "taking our time" over a free trade agreement.

Chinese premier Li Keqiang said at a meeting with Canadian Prime Minister Justin Trudeau on Wednesday that both countries had agreed to start feasibility talks on a free trade pact at an early date.

The deals signed on Thursday involve companies in sectors from seafood to clean technologies, the trade minister said ahead of a speech by Trudeau.

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Art of the deal

The Prime Minister's Office released a list of the deals. Here is a look at a few:

• Alberta Ministry of Economic Development and Trade and BYD, the world's largest green vehicle manufacturer, signed a memorandum of understanding (MOU) to cooperate on research, development, and commercialization of autonomous cars, trucks, buses and industrial vehicles.
• Cows Creamery of P.E.I., which opened its first shop in Beijing in 2014 and another this summer, announced a strategic partnership with Yintai Group to introduce Cows stores to Yintai's high-end shopping centres and co-develop e-commerce and other projects across China.
• Quebec's Cirque Éloize, together with Chinese promoter Shanghai Fresh Vogur, announced a second major tour in China, June to September 2017.
• HyLife of Manitoba agreed on terms with JD.com to market Canadian pork products on the Chinese company's e-commerce platform. Revenues from the site sales are expected to reach around $6 million by the end of 2018. HyLife also plans to invest $90 million on the expansion of its plant and hire 165 more Canadian employees to address growing Chinese demand.
• Linamar Corp. of Ontario announced that construction has begun on its wholly-owned, $118-million factory in Chongqing. The 26,000 square-metre facility, expected to be operational in late 2017, will manufacture energy-efficient power train components and assemblies for manufacturers in China's southwestern region.
• Ontario's Sheridan College signed a co-development agreement with Shanghai Dramatic Arts Centre for a new musical based on the life of Norman Bethune. The Canada-China production will premiere in 2019.

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A deep and effective economic relationship with China needed to be built consistently, thoughtfully and carefully, Freeland said.

Canola deal coming

The trade minister said an 11th-hour deal to delay new, stricter rules on canola imports was a meaningful and important step for Canada.

Starting Thursday, the Chinese government had planned to enforce tighter regulations on the amount of foreign materials — such as weeds, other crops and detritus — permitted in canola exports from Canada.

China is Canada's top export market for the oilseed, and Ottawa has taken a strong line in talks on a new standard, which may raise costs for exporters. Canadian farmers sold $2 billion worth of canola seed last year in China, about 40 per cent of the country's exports of the crop.

Chinese President Xi Jinping, right, shakes hands with Canadian Prime Minister Justin Trudeau ahead of their meeting at the Diaoyutai State Guesthouse in Beijing. (Wu Hong/Reuters)

Freeland said Canada is committed to reaching a long-term and permanent canola deal with China at an early date.
During the first leg of his China trip, Trudeau also announced plans to become the first North American member of the
Asian Infrastructure Investment Bank (AIIB).

China established the AIIB in hopes of building its economic credibility around the world. The bank will provide other countries in the region access to capital for projects like transportation, power and telecommunications.

Finance Minister Bill Morneau, who is travelling with Trudeau in Beijing, expects the bank to make an important impact on the global economy, and therefore the Canadian economy, through infrastructure investments.

Canada's application is due in September.

http://www.cbc.ca/news/politics/chin...deal-1.3744036

Mon Sep 19, 2016 | 12:52pm EDT

Australian port sold for $7.3 billion to consortium; China fund among backers

Shipping containers and cranes are seen at a port holding yard in Melbourne in this June 2, 2010 file photo. REUTERS/Mick Tsikas/Files

By Cecile Lefort and Byron Kaye | SYDNEY

A consortium of global and domestic funds, backed by investors including China Investment Corp, agreed to buy Australia's busiest port for a higher-than-expected A$9.7 billion ($7.3 billion), a sign that tough equity markets are helping fuel appetite for infrastructure.

Australian leaders will also hope the deal shows they still welcome Chinese investment in infrastructure. The federal government last month blocked the sale of the country's biggest power network, Ausgrid, to state-owned State Grid Corp of China and Hong Kong-listed Cheung Kong Infrastructure Holdings on security concerns.

The price tag for Port of Melbourne fell short of the country's largest privatization deal on record, the A$10.8 billion sale of electricity grid company Transgrid to a global consortium in November 2015, but still ranks among its biggest.

It also smashes the target set by the government of Victoria state which previously said it hoped for A$5.8 billion for the container and multi-cargo port. In 2013, the two ports of larger city Sydney fetched A$5 billion.

Sovereign wealth funds and other asset managers are seeking long-term investment opportunities amid weaker returns from some equity markets and lower bond yields.

"Equity markets are starting to realise that they're going to live in an environment where returns are going to be lower for longer, and they're looking for secure investments," Victoria Treasurer Tim Pallas said in a telephone interview.

FREE TRADE AGREEMENT
Australia began a free trade agreement with China in December but has been trying to ease diplomatic strains since the Ausgrid rejection. China's commerce ministry warned at the time that the move "seriously impacts the willingness of Chinese companies to invest in Australia".

On Monday, Pallas said Australia's sovereign wealth fund, The Future Fund, and Canada's Ontario Municipal Employees Retirement System will each get a fifth of Port of Melbourne following the sale, which is packaged as a 50-year lease.

The government investment vehicle of Queensland state (QIC) and New York-based Global Infrastructure Partners are the other consortium partners.

China Investment Corp [CIC.UL] is a major investor in Global Infrastructure Partners. South Korean pension fund NPS is also an investor. QIC's investors include California Public Employees' Retirement System (CALPERS).

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All foreign buyers have regulatory clearance, Pallas added. The deal is expected to close on Oct. 31, a statement from the consortium said. Gresham Partners and Credit Suisse acted as financial adviser to the consortium.

The sell-off is part of Australia's more than A$100 billion privatization program, where state and federal governments are trying to cut debt and bankroll capital works by selling "mature" infrastructure assets.

New South Wales state, which arranged the troubled Ausgrid sale, is again trying to offload that asset, and plans to dispose of another grid afterwards. Western Australia state meanwhile wants to sell ports, while the Federal government is selling the Australian Security and Investments Commission's registry arm.

http://www.reuters.com/article/us-au...-idUSKCN11P04O

They built towering new cities in China. Now they're trying it in downtown L.A.

Originally Posted by Captainron

Sure, we are told they are "putting money into the economy." Yeah right. They are only doing this because they have some connections back in China that they expect to benefit from their US investments. . .

That's why anyone in the world invest anyplace in the world, to make money from their investment.
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According to economist Milton Friedman, the main purpose of a business is to maximize profits for its owners, and in the case of a publicly-traded company, the stockholders are its owners.

The Goals of a Business

https://www.boundless.com/business/...business...business...business.../the-goals-of-a-bus...

September 22, 2016 12:00 pm JST
Peter Fuhrman:

Smart Americans are snapping up Chinese companies


© AP


Chinese investments in the U.S. make headlines and cause occasional hand-wringing about Beijing's growing influence. It is true that Chinese investors have been throwing billions of dollars around. But conversely and far more quietly, U.S. investors have been buying businesses in China. The American acquirers often stay out of the headlines, shopping quietly without alerting competitors.




This does a lot to keep prices down and gives the U.S. buyers maximum negotiating leverage. Many of these China acquisitions stay secret long after they close.


Contrast this style with that of Chinese investors in the U.S. Many end up bidding against one another for the same assets. Overpaying is becoming a hallmark of Chinese purchases in the U.S.

Compared with the huge number of Chinese companies shopping for assets in the U.S., not nearly as many U.S. companies are sizing up deals and kicking tires in China. This stems partly from misunderstandings about what kinds of Chinese businesses can be targeted. Topping the list of sweeping generalizations: Chinese companies, especially private ones, have owners who rarely wish to sell. Those that do want to sell deeply troubled companies at high prices.

There is some truth to this armchair analysis. But there are good deals being done and good reasons to buy rather than build in China. China has huge and fast-growing markets in almost all industries except the smokestack ones. For buyers that can choose and execute well, the China market is proving lucrative ground for mergers and acquisitions. Only a select group of smart U.S. buyers know this.

3D SYSTEMS The purchase last year of a 65% stake in Wuxi Easyway Model Design & Manufacture, a Chinese 3-D printing sales and service company, by printer manufacturer 3D Systems is a prime example of the low-profile acquisitions being made by smart American buyers.

The deal provided 3D Systems, a South Carolina company listed on the New York Stock Exchange, with a developed sales network and increased distribution in China. Easyway's customers in China include Volkswagen, Nissan Motor, Philips and Omron.

Another key aspect of the deal was making the founder of Easyway, a Western-educated Chinese, CEO of the newly formed business 3D Systems China, making him king of a larger kingdom. This is a carrot frequently dangled by American companies to clinch deals.

3D Systems makes high-quality 3-D printers that sell at significantly higher prices than Chinese ones. Owning a Chinese business with established customer relationships locally will make it easier for 3D Systems to penetrate more deeply into what should become the world's largest market for 3-D printers.

Prior to the acquisition, Easyway was not a major client or partner of 3D Systems. As integration moves forward, Easyway will likely expand its product offerings in China beyond the relatively commoditized business of producing 3-D prototypes. 3D Systems' printers have broader capabilities, including the production of end-use parts and molds for making advanced tools and medical and surgical supplies.

http://asia.nikkei.com/magazine/2016...nese-companies

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