China's companies will learn the rules of the game they are now staring to play—and western investment banks are lining up to relieve them of hefty fees in return for teaching them. The companies' government—often their their senior shareholder as well—wants them to acquire foreign assets, notably the natural resources and consumer brands and expertise that they cannot grow rapidly at home.
China's national interest is its imperative, and cross-border M&A is the way to fulfill it. China's largest companies—the ones most likely to be doing the big deals—may be mostly state-funded and have managers largely hand-picked in Beijing. But they will have to learn how to win at this most capitalist of games, M&A. The way to do that is not, as CNOOC did, by launching big, high-profile bids in politically sensitive industries, but to do a bunch of smaller deals that can actually get done. Small wins lead to larger victories.
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