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In this presentation, FMC's Wei Shao discusses the current landscape regarding Chinese Capital and Chinese Investment in Canada.
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Chinese Capital & Chinese InvestmentIn Canada An Overview
Presented by: Wei ShaoOctober 18, 2012 (Vancouver Economic Commission)
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Chinese Capital & Chinese Investment in Canada – An Overview
• China’s Dependence on Import of major Resources
Oil 40% Nickel 51.3%Iron Ore 64% Cobalt 85%Copper 72% Platinum 86%Chromium 90% Potash 85%Manganese 69%
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Chinese Capital & Chinese Investment in Canada – An Overview
• Recent Developments
– 12th anniversary of the “Going Global” launch and $320 billion– Accelerated investment since 2008– Geographical preference – from regional to international– Larger and high profile transactions– Greenfield and exploration projects– Canada, Australia, Brazil
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Chinese Capital & Chinese Investment in Canada – An Overview
Chinese Investors
State Owned (Central)
State Owned (Provincial)
Private
Others
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Chinese Capital & Chinese Investment in Canada – An Overview
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Chinese Capital & Chinese Investment in Canada – An Overview
• Policy Evolvement
– 2004 – 2009 Guiding Catalogue of Countries and Industries for Overseas Investment
– 2005 China Outbound Investment Rules– 2009 Administration of Overseas Investment– 2009 SAFE Rules Governing Overseas Investment by Domestic
Companies and Institutions– 2010 – 2011 Special Guidelines to Encourage Overseas Investment– 2012 Guidelines to CSOEs
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Chinese Capital & Chinese Investment in Canada – An Overview
• Players – Investors in Canada
– State owned (Central) enterprises– State owned (Provincial) enterprises– Private companies (including Hong Kong listed companies)– Private companies controlled by Canadian residents– Policy banks and commercial banks– Investment funds
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Chinese Capital & Chinese Investment in Canada – An Overview
• Recent Trends
– Roles of private capital– Policy banks and commercial banks– Growing sophistication of funds– Internal rivalry and “No competitive bids”– “Going hostile”
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Chinese Capital & Chinese Investment in Canada – An Overview
• Incentives for Chinese companies going global
– Conventional lines of credits and loans– Fund to encourage overseas explorations projects– Strategic minerals and resources– The strengths of Yuan– Diversification from US bonds
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Chinese Capital & Chinese Investment in Canada – An Overview
• How China sees Canada
– Perceived US influence– From “cool politics but warm economics” to strategic partners and
mutual complementarities– Branding and image– Canada as a safe country for investment– CNOOC – Nexen and its implications
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Chinese Capital & Chinese Investment in Canada – An Overview
• China’s Interest in Canada
– From potash to iron ore and met coal– Copper, nickel, gold, uranium– Infrastructure and engineering– Chinese machinery and equipment– Canadian capital market
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Chinese Capital & Chinese Investment in Canada – An Overview
• Vancouver and Chinese Investment
– Headquarters of Chinese operations in Canada– 4 banks and 35 offices– Private capital– From shipping to movie production– Beyond tourism and real estate
Thank you !Fraser, Milner Casgrain LLPWei Shao, Partner, China Practice
The preceding presentation contains examples of the kinds of
issues companies working with Chinese Capital & Chinese
Investment In Canada could face. If you are faced with one of
these issues, please retain professional assistance as each
situation is unique.
