Passage 4
The economic phenomena of the Barbie doll helped explain the reason why an increasing number of Chinese enterprises purchase well-known brands overseas. Like the recent case of a Chinese enterprise purchasing the Volvo.
The viewpoint held by Taodong, economist from UBS, is frequently borrowed by Chinese government officials and enterprises. Tao claimed that the price of a plastic Barbie doll is , from which Chinese manufacturers could only gain 35 cents The lesson we could learn from this case is that it is brand that can bring profits, not "working" for overseas enterprises.
The large-scale overseas M&A of China are mostly carried out by state-owned business, and their main targets are mine and oil fields, by which the raw materials of the fast-developing economy of China could be assured. On the other hand, a trend has began several years before-in hope of catching up with international competition, the ambitious private-run businesses are busy purchasing overseas brands. However, analysts indicated that this fast-developing trend would probably -lead to the overseas rebound. Moreover, because those requiring enterprises lack experience of international M&A, it would cost an arm and a leg.
"Many Chinese enterprises have ranked in the list of Fortune 500, and they wish to continue improving their fame world-wide. He Yuxin, an analyst of Long Zhou Jing Financial Research and Consulting Institution said.
For the past 10 years, China has been encouraging its enterprises to "go global fearlessly" and to realize the Economic Diversification. The statistics data given by Chinese Commerce Department showed that from 2007 to 2008, Chinese investments abroad had more than doubled, reaching 55. 9 million dollars.
The tide of merging in China reminds people of Japan in the1980s. At that time,the Japanese's purchase of "Pebble Beach" Golf Course in California and Rockefeller Center in NY stirred up American's unrest-they feared that Japan would rule the world.
Similar resist also impediment some large-scaled M&a deals. Disputes exist about whether China will commit the same mistake as Japan. Huo Jianguo, dean of the College of International Trade and Economic Coorporation of Chinese Commerce Department said that Chinese government would continue objecting strongly to M& deals in sensitive industries such as oil enterprises.“However," he said,if the project is based on mutual reciprocity and profits, and meantime drives local employments and tax income, it will surely be accepted and promoted.
Cash-starved enterprises give warm welcome to Chinese investers and mergering proposals. General Motors lapped at selling its Hummer to Teng Zhong Industry Coorporation in Sichuan province, China. Chinese government however, rejected the deal.
Chinese enterprises can offer lower prices in international acquisition.
A.True
B.False
正确答案是B