Wall Street Warms to China Story WSJ 1-2-11

Wall Street Warms to China Story WSJ 1-2-11 -...

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http://online.wsj.com/article/SB10001424052748703859204576054201915704960.html?KEYWORDS=wall+street+warms+to+china+story JANUARY 2, 2011 Wall Street Warms to China Story By GREGORY ZUCKERMAN Visiting China was considered an indulgence for most financial executives just a few years ago. But when Berkshire Hathaway Inc.'s Warren Buffett , J.P. Morgan Chase & Co.'s James Dimon , Kohlberg Kravis Roberts & Co.'s Henry Kravis and Carlyle Group's David Rubenstein all visited China in recent months, the trips were seen as something else entirely: crucial steps to keep their respective companies growing. China has been important to global economic growth for years, of course. The country likely emerged as the world's second-largest economy in 2010. It is expected to show close to 10% growth in both 2010 and 2011. Until recently, however, China was something of a sideshow for many financial professionals. Global growth was key to China's health, and the country had an impact on many economies. But China didn't seem to matter much to most deal makers and wealth creators. Agence France-Presse/Getty Images Shanghai is no longer a sideshow for U.S. financial professionals. That's all changing. China is opening its markets, slightly loosening the reins on its currency, and is emerging as a key to the future of almost every Wall Street firm. It's also a linchpin of the investment strategies of a growing number of hedge- and private-equity funds. Consider that global initial public offerings of Chinese companies amounted to $104 billion in 2010, according to data-tracker Dealogic, up from $54 billion in 2009. Last year's tally amounts to $126 billion if Hong Kong companies are included, though it includes domestic markets not fully accessible to foreigners. By comparison, less than $34 billion of U.S. IPOs took place in 2010, the second consecutive year that Chinese companies topped U.S. companies in IPO issuance. Bankers that didn't participate in Chinese IPOs risked seeing smaller bonuses. No Chinese investment bank has emerged as a global power, reducing alibis for not establishing a presence in deals available to foreigners. Meanwhile, mergers-and-acquisitions specialists are racing to China to work with companies like China National Offshore Oil Corp. , known as Cnooc, and China Petroleum & Chemical Corp., or Sinopec, among the biggest deal makers in 2010. Chinese companies completed 3,235 acquisitions valued at nearly $190
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Wall Street Warms to China Story WSJ 1-2-11 -...

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