What are the motivations for cross-border mergers and acquisitions by Chinese enterprises

Legal analysis: the motivations for cross-border M&A by Chinese enterprises are: (i) bypassing trade barriers. Cross-border mergers and acquisitions bypass foreign intellectual property protection barriers and quickly enter strategic industries. In recent years, with the general reduction of tariffs in all countries, trade protectionism has risen, seeking legal and secretive protection tools more and more countries, they set up heavy obstacles for enterprise exports, in the form of: First, the import quota restrictions, Chinese enterprises in order to expand the foreign market, especially penetrate the market of developed countries in Europe and the United States have to bypass trade barriers through mergers and acquisitions or direct investment. These mergers and acquisitions are to make the enterprise production localization, thus based on the host country, bypassing tariffs non-tariff barriers, but also through mergers to reduce market competitors. (ii) Access to strategic resources. China's rapid economic development, limited domestic resources are difficult to meet the needs of rapid economic development, while more and more countries around the world to primary forms of resource exports to adopt restrictive policies, the demand for oil and other mineral resources so that overseas investment has become the inevitable choice of Chinese enterprises to use foreign resources. (iii) Enhancement of technological innovation capacity. In the current large-scale manufacturing transfer of multinational corporations to China, the hollowing out of core technology has become the main problem in the transfer process, technology, especially the lack of core technology is compared with self-development to build the core competitiveness of enterprises, cross-border mergers and acquisitions of the strong timeliness, low-cost, especially when a certain kind of knowledge and resources exclusively belonging to another enterprise, mergers and acquisitions have become the only way to obtain the advantage. (iv) Expanding development space and seizing international market. Chinese enterprises usually take the way of trade to enter the international market, but for the highly developed and mature markets in Europe and America, the entry of new brands is exceptionally difficult, and the entry costs such as huge advertising and marketing expenses are quite high. Since most Chinese enterprises lack international brands, making products in the international market sales poor, only OEM production to earn low processing fees, therefore, through cross-border mergers and acquisitions as soon as possible to establish a Chinese enterprise's international brand and the formation of their own marketing network, not only to meet the needs of enterprise development, but also to quickly and effectively open up the international market.

Legal basis: "Chinese People's *** and the State Company Law" Article 172 The merger of companies can take the absorption of the merger or merger. A company absorbs other companies as a merger by absorption, and the absorbed company is dissolved. The merger of two or more companies to establish a new company is a merger by de novo, and the merging parties shall be dissolved.