PRINT THIS PAGE M&A in China21/03/2005. Source: PricewaterhouseCoopers.
M&A activity in China is being driven by continued restructuring and privatisation of former state-owned enterprises, finds PricewaterhouseCoopers. Recently discussions on China's macro-economy have primarily centred on two questions: whether China's government can engineer a soft-landing of the economy, and whether it will revalue the Renminbi.
In respect of whether China has landed softly, beginning in Spring 2003, when the People's Bank of China launched bond auctions to 'sterilise' the market by removing excess liquidity in China's banking system, China's government has lifted reserve requirements, ordered lending to the steel, cement, and automotive industries to be cut, implemented selective price controls, and increased pressure on low-level officials to comply with central policies. The clearest signal that this effort is still on-going was the People's Bank of China raising interest rates on 28 October 2004 by 27 basis points for one year loans.
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