February 2, 2017 - Mergers + Acquisitions

Chinese Interest High Despite Uncertainty

How does China view the United States as an investment market under the new Administration?

Despite United States withdrawal from the Trans-Pacific Partnership (TPP) and rumblings in Washington about tightening regulatory review on inbound investment and M&A from China, interest from China to invest/acquire in the United States in general – and California in particular – has never been higher.

Several factors are driving this trend.  First, Chinese funds and strategics note the relatively poor quality and overpriced nature of deals currently in the China market.  As a result, these players find themselves with large pools of capital still looking for a home.  Investing to bring leading-edge technology and services from the United States to the still-burgeoning consumer market in China (as Alibaba’s latest quarterly results attest) is the natural strategy.

Additionally, a strengthening “risk-on” feeling about the Chinese currency renminbi and China’s macroeconomic prospects has heightened Chinese investor interest in the United States.  So as the pace of U.S. venture investment continues to slow, for properly positioned companies in California looking for alternate investment sources, the timing couldn’t be better. 

The article includes a checklist to help founders, investors, and directors of venture companies with cross-border aspirations navigate cross-currents in today’s unsettling environment.

Read the full article.