The Shanghai Exchange of Property Rights (SEPR) and the Shanghai Foreign Investment Promotion Center jointly announced the opening of a “fast channel” for approval recently.

All the merger and acquisition projects that conform to the government's industrial policy and involve transaction values less than 10 million US dollars could be dealt with through the channel, said Zhang Hailong, chief executive of SEPR.

Under the new procedure, approval for property rights transactions and foreign investment will be treated as one. Approval for corporate constitution and other items shall also be simplified.

Liu Jinping, a senior municipal official in charge of foreign investment, estimated that the "fast channel" will save investors one-third of their time, compared with the previous procedures.

The above mentioned organizations shall strive to help investors find potential projects. The SEPR also plans to recruit foreign and joint venture banks as its members for that purpose.

Merger and acquisition has become an increasingly popular form of foreign investment internationally. Worldwide transactions totaled US$3.5 trillion in 2000.

In Shanghai, the SEPR recorded 1.966 billion yuan (US$236.86 million) worth of foreign merger and acquisition cases last year, up 29.25 times over that of 1996. The share of merger and acquisition cases involving foreign investors rose 150 percent in total value.

Economists point out that with China's expected accession to the World Trade Organization and advancement of the state-owned enterprise reform, merger and acquisition will become a more and more important channel of foreign investment in China, which they say will save foreign investors both time and costs.

The latest official figures show that approved foreign investment to Shanghai reached 2.1 billion US dollars in the first quarter of the year, which more than doubled that a year ago. Total foreign investment to Shanghai at present amounted to US$47.5 billion.

(Xinhua 05/20/2001)