Page 243 - DMGT549_INTERNATIONAL_FINANCIAL_MANAGEMENT

International Financial Management

Notes

Caselet China’s Capital Markets and Cross-border
Investments

hat is China’s capital market situation now, and what will future investment
opportunities in China look like? From a Chinese investor’s perspective, what’s
Wthe current situation in the U.S. market? These were among the questions
discussed at the Cornell China Conference by a panel moderated by Johnson’s George
Gao, assistant professor of finance, Capital Markets and Cross-border Investments. The
conference, held Oct. 27-28 and hosted by the Cornell Chinese Students and Scholars
Association, was the first multidisciplinary conference focused on China held at Cornell.
More than 40 speakers attended the conference.
Participants on the Capital Markets and Cross-border Investments panel addressed the
issues from different perspectives. Panelists included: Huining Henry Cao, professor of
finance and chair of the finance department at Cheung Kong Graduate School of Business;
Ted Kamman, partner at Sidley Austin LLP; Shanquan Li, managing director and senior
portfolio manager at Oppenheimer Funds; Barry M. Sine, CFA, CMT, managing director
of equity research at Drexel Hamilton LLC; Ming Zhong, executive vice president at TCFA
and senior portfolio manager at Lazard Asset Management; and Winston Ma, managing
director at China Investment Corporation. Their discussion covered a wide range of topics,
from global trends for cross-border investment to the Chinese government’s regulation
of private equity.
China Investment Corporation’s Winston Ma observed that the cross-border investment
structure is diversifying: “In the future, we will probably see more obstacles for takeover
deals,” he said. “Government may call for minority and early-stage investments.”
Oppenheimer Funds’ Shanquan Li noted that there are many strategies Chinese companies
can employ when they invest abroad. He observed that most Chinese companies try to
gain controlling interest as shareholders all at once. Instead, Li advised, those companies
should gradually increase their shares and learn more about the companies during the
process before they make the decision to become controlling shareholders.

Market regulations in China made for a hotly debated topic. Sidley Austin’s Ted Kamman
remarked: “There is too much regulation in the private equity market and too little
regulation in capital markets. It needs to be reversed.” Others said the regulations are
gradually improving. Huining Cao of the Cheung Kong Graduate School of Business
pointed out that the China Securities Regulation Commission now has a research institute,
the Beijing Institute of Securities and Futures; the intent is to base regulations on solid
research. Johnson’s George Gao concluded that he believes China now understands how
important research is, and that, hopefully, regulations based on research will provide
more investment opportunities in China in the future.
Source: http://www.johnson.cornell.edu/About/News-Publications/Article-Detail/ArticleId/5065/
China-s-Capital-Markets-and-Cross-border-Investments.aspx

238 LOVELY PROFESSIONAL UNIVERSITY