Bargain-hunting overseas chances Fading

Jimmy like to play deep without expose in his comics, he often writes a few quite philosophical words under the picture. He has a cartoon entitled "Lulu's homework", in which he wrote: "Lulu could not swim or fly, her ducks as well. Everyday Lulu, together with ducks, go to ponds watching how others swim and fly everyday, she also gets every happy day.

Recently, China's automotive media are also frequently do "Lulu's homework" which is, bring the Chinese auto ‘ducks’ with them, watching foreign car ‘bird’ flying at the edge of the Pacific. China's auto ‘ducks’ can not fly up, but they can swim in the water. Then the media tell everybody: China's auto ‘ducks’ are also flying. So everybody is very happy.

But how long can this happy day last?

Recently in Dongfeng Automobile 40-year celebration, Dongfeng official showed that, with regard to the spreding message that Dongfeng will merger Volvo or GM plant in Australia, ‘The message is just the subjective speculation. Dongfeng Automobile only interested in restructuring or merging companies which have a strategic complementary relationship, we will not grandstand the acquisition!’

Geely finance news also attracted everyone's attention, Geely Automobile and GSCP- Goldman Sachs Capital Partners, has achieved intention: GSCP will invest on Geely through subscribing convertible bonds and warrants, Geely will get 2.586 billion Hong Kong dollars (330 million U.S. dollars) after fully exercising convertible bonds and warrants. If, as the talked-Chuan that Geely will acquire Volvo, the size of its financing will be billions of dollars. When China Central Television interviewed me for that matter, I was asked whether financial situation of Geely is good. I said, the development of the auto companies goes in controvert with the money, because the high demand if funds. But it is very difficult to finance domestic, more difficult for, particularly private corporate financing. If these problems can not be properly resolved, it is very easy for foreign investment to catch our off guard.

Comparatively speaking, China's auto makers are still in small-scale and weak in technological strength, they have no strength in large-scale acquisitions in overseas. A Ssangyong has put one of China's World Top 500 in a sorry plight, it seems not a happy thing.

Minister of Commerce Chen Deming said in early September, in order to effectively deal with the current crisis, the Chinese government will launch a new policy to stabilize foreign investment and gradually reduce the restrictions of proportion of foreign equity investment, allow qualified foreign-invested enterprises going public within the country to upgrade its capacity on developing in China. Under the situation of keep domestic industry safe, guide foreign investment involved in the reorganization and transformation of domestic industries through mergers and acquisitions. The background of these policies Introduction is the 10 consecutive months’ decline of foreign investment.

This year's car market is very good, but this can not cover up the weakness in structural adjustment, self-developed area and so on. We should thank the government spent tens of billions of RMB helping automotive industry, what is the situation will be if China's auto market fell 20 percent? Opportunities in bargain-hunting overseas have gradually disappeared, and we in danger of the risk of being outflanked and attacked from the rear. (Tongwen-Xiewen)

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