WHEN INFLUENTIAL MORGAN Stanley economist Stephen Roach recently issued a research note that began by describing China as 'the closest thing to an oasis in an otherwise struggling global economy', one United States-based executive forwarded it on to colleagues with the following exclamation: 'Things are hopping in China! Pack your bags folks.'
Though the research note's core point was a cautionary one about the global deflationary implications of China's dramatic export-led growth, it began by emphasising the mainland's strong gross domestic product and export figures for this year. It also pointed to the China Securities Regulatory Commission's recent decision to allow - in principle - foreign and privately owned takeovers of listed state-owned enterprises (SOEs) as evidence that 'the restructuring of SOEs is unstoppable and new market-opening reforms continue to be put in place in the aftermath of China's accession to the World Trade Organisation [WTO]'.
The executive's reaction to Mr Roach's initial observations is a good example of the unbridled optimism with which many multinationals view the mainland in light of its WTO accession.
As such, it is reminiscent of the giddiness that infected China's foreign investment community in the mid and late-1990s, before the hard realities of doing business there induced a hangover - albeit only a temporary one.
But for those foreign investors who have once again been bitten by the China bug, draft merger and acquisition (M&A) measures published this week should serve as a cautionary reminder that their wildest China dreams are not going to be realised overnight.
The draft temporary measures were released Tuesday by the Ministry of Foreign Trade and Economic Co-operation (Moftec) through the China Securities Journal.