Ms. Ma pointed out that mergers and acquisitions were an important part of international investment. Multi-national investment reached US$1000 billion worldwide last year and 80 percent of the total was by mergers and acquisitions. China saw US$40.7 billion in direct investments last year but little by way of mergers. The gap was due to problems with the current laws. Improving these laws is essential to increasing multi-national investments.

　　China has already revised the Laws on Foreign Equity Joint Ventures. The new amendments make no prohibitions on mergers and acquisitions. There are some different opinions on the problem. Ma Yu, a senior researcher with the MOFTEC said Tuesday that mergers in China faced many immature conditions besides laws. Mergers in China require government approval. Second, the capital markets, including the security market and property rights market, have no rules on mergers. As a result, companies have no market to complete mergers. Third, we lack agencies such as investment banks, law firms and accounting offices.

　　Although there are many difficulties, Yu Weixiang, director of a WTO research center thought some improvements have been seen in Beijing. Though direct investment, such as establishing joint ventures accounts for over 70 percent of total investment, in recent years, cooperation between multinational companies and China has improved even further. For example, 150 listed multinationals in Fortune 500 have invested in Beijing. They have established up to 11 regional headquarters, 20 R & D centers. To multinational firms such direct investments will become the basis for future mergers and acquisitions.

(Xinhua 06/05/2001)