With the sustainable growth of China's economy, Price Waterhouse Coopers predicts that the year 2007 will continue the gaining momentum of M & A activities in China in 2006. The investment activities of foreign investors will continue to be active. The proportion of trade through inbound investment, outbound investment, private fund-raising and risk investment will go up. The types of the investors will also further expand.

Xietao, the partner in enterprise M & A Service division of Price Waterhouse Coopers said in Beijing yesterday that although the examination and approval of large overseas acquisition activities was likely to be temporarily delayed because the explanation of related rules and regulations has not been cleared up, the implementation of the new rules and regulations would further increase transparency to facilitate the trade on the capital market so that inbound M & A activities could be stimulated to increase.

According to statistics from M&A Asia, boosted by the inbound enterprise transaction, private fund-raising transaction and risk investment transaction, the transaction number announced by the mainland in China, Hongkong and Macao has reached 1234 and increased by 30% in the first 11 months, 2006 compared with 950 in 2005.

The transaction volume published by mainland of China, Hongkong and Maokao totaled USD48.7 bln during the first 11 months, 2006 and was slightly lower compared with USD54 bln in 2005.

As the industry integration speeded up, Price Waterhouse Coopers predicted that the inbound transaction activities would see sustainable growth in 2007. Xietao said that Chinese M & A market tended to be mature. The type of investors became wider and wider with more and more invested capital. At the same time M & A also provided the channel of overseas investment to enterprises, which was attached great importance to and encouraged by the government. Therefore there was no reason to believe that gaining momentum of M & A could not continue into 2007.

On the other hand, the capital from private fund-raising in 2006 hit a historic high. So it will also need to seek way out of investment in 2007.