News | 29 May 2019

SME: Expansion in China

On 28 May 2019, together with FalkenSteg, Mandarin Capital Partners and the WHU – Otto Beisheim School of Management, we held an event in Frankfurt on how German small and medium-sized enterprises can expand in China. About 50 participants from various industries accepted our invitation.

 

The event started with a highly insightful keynote by Prof Dr Serden OZCAN of the WHU – Otto Beisheim School of Management, summarizing his research results on the economic results of German-Chinese M&A transactions.

 

Subsequently, Sheng Heng Law Firm's Tim A. FONGERN gave an overview of the current legal framework for foreign investment in China, notably the recently revised negative list, the special Chinese rules for foreign-invested enterprises, and the new Foreign Investment Law, which will enter into force in China in 2020. FONGERN assumes that China will continue to open up to foreign investors in the future as well.

 

Jochen WIERZ from FalkenSteg then reported on his experience in the establishment of German-Chinese joint ventures. WIERZ provided many practical examples of how such partnerships could work out well or less well and gave many helpful hints to the participants. Despite his so far "rather mixed" experiences, he sees joint ventures as an attractive option to operate in the Chinese market.

 

Finally, Inna GEHRT explained the business model of Mandarin Capital Partners. Based on three case studies, she explained how Italian SMEs, with the help of private equity capital, succeeded in entering the Chinese market. According to GEHRT, this is also an interesting and proven promising option for German medium-sized companies, which tend to be more reluctant to private equity capital.

 

We thank Pro. Dr SCHALAST for the warm welcome at the venue, the Frankfurt School of Finance and Management, and Ms Jia SONG of West meets East Business Consulting for the great moderation of the event.




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