Pork takeover shows China hunger for foreign feasts

A Chinese firm's multi-billion-dollar takeover of the biggest name in US pork is the latest example of the country's global business ambitions, analysts say -- and the need to satisfy domestic demand for quality.
In what will be the biggest Chinese corporate purchase ever in the United States if approved, meat processor Shuanghui International said last week it was buying Smithfield Foods in a deal that valued the US company at USD 7.1 billion.
That announcement came just two days after Chinese conglomerate Fosun -- the single largest shareholder in Club Mediterranee -- said it was making a joint bid for the French holiday group.

Chinese companies are increasingly moving into foreign waters. Direct investment overseas in non-financial sectors surged 28.6 per cent in 2012 to USD 77.22 billion, spread across 141 countries and regions.
Once focused on securing resources such as oil, gas and commodities essential to fuel China's rise to become the world's second-biggest economy, the trend now is more complex.
"Chinese companies' overseas acquisitions indicate that China is redefining its position in the global economy," shifting up the value chain from being the workshop of the world, Li Guoxue, a researcher at the Chinese Academy of Social Sciences, said in an email.

"China's rising global influence has also facilitated overseas investment of Chinese companies," he added.

It is also the natural result of firms getting bigger, said Bala Ramasamy, professor of economics at the China Europe International Business School (CEIBS) in Shanghai.
"You have companies that are becoming larger and they are looking for opportunities," he said. "So the opportunities no longer are domestic in nature but they become more global."
But Chinese acquisitions can face political opposition overseas.
China's biggest overseas takeover came last year with the USD 15.1 billion purchase of Canadian oil and gas giant Nexen by Chinese state-owned energy behemoth CNOOC.

After initial resistance Ottawa approved the landmark deal in the end.
CNOOC had been forced to withdraw a bid for US oil and gas producer Unocal in 2005 due to national security concerns in Washington.