China’s Shift to Consumer Driven Economy to Take Up to 5 Years, Predicts Dezan’s Devonshire-Ellis at Asia M&A Dealmakers Summit; China GDP to Range 4% to 5% Annually

Mumbai, India, October 13, 2009 --(PR.com)-- China’s shift from an export driven financial foundation to a more consumer driven profile will take three to five years and limit the country’s growth in gross domestic product (GDP) to an annual range of 4% to 5%, Chris Devonshire-Ellis, the Founder and Senior Partner of Dezan Shira & Associates, predicted here today.

Devonshire-Ellis, a featured speaker at the two-day the Asia M&A Dealmakers Summit, said that China’s government is actively supporting the transition from an export driven economy to a more balanced consumer based economy, but that the change is bound to take time and a slow down in growth “is inevitable.”

Speaking on “China M&A: Era of Changing Economic Environment,” and offering his annual “Crystal Ball Summary” about the state of China’s economy, Devonshire-Ellis identified several strong Chinese domestic brands, particularly those well known in China’s inland regions, as being potential M&A targets.

The principal of Dezan Shira & Associates, which concentrates on providing legal, incorporation, due diligence, tax, accounting and compliance work to U.S., European and other multinational corporations considering or involved in foreign direct investment (FDI) initiatives in China, Hong Kong, Vietnam and India, also cited supply chain management in China as a market for investment.

Devonshire-Ellis issued a warning to prospective investors, urging them to be both cautious and thorough when conducting due diligence when acquiring brands. Concurrently, he said, it is imperative to have a full understanding and to ensure control of pertinent supply chain factors as these are often overlooked when completing investments in China.

Devonshire-Ellis noted that China M&A is “becoming increasingly government institutionalized,” providing evidence of such in both the public and private equity markets. He said no foreign companies are yet permitted to list on China’s much-quoted stock exchanges, further indicating that the Chinese government directly or indirectly owned 90% of all listed companies.

“China’s M&A deals are largely being led by state funded domestic players,” Devonshire-Ellis said.

Devonshire-Ellis reported that 616 M&A transactions occurred in China during the first quarter of 2009 and 811 were recorded in the second quarter. Of the total 1,427 first half transactions, only 12 deals accounting for 14% of the dollar volume of all transactions were the result of foreign investors. Similarly, foreign corporations were responsible for 21% of the value in all China M&A deals in 2007.

Dezan Shira & Associates , http://www.dezshira.com/ , is a multi-office provider of legal, accounting, compliance and other business services based in China. Founded in 1992, the firm provides a range of services for companies considering or already having made a in foreign direct investment (FDI) in China. These offerings include Chinese accounting, tax, payroll and due diligence services. These services are also provided in Dezan Shira has 16 offices strategically located in China, Hong Kong, Vietnam and India.

Dezan Shira also publishes a variety of magazines, books, newsletters and other publications through its Asia Briefing Media Ltd. Its primary publications include "China Briefing,” "India Briefing," "Vietnam Briefing" and "2point6billion" - the latter title being derived from the combined population of China and India, and showcasing business developments in Emerging Asia.

Dezan Shira & Associates is a member of The Leading Edge Alliance based in Chicago.

###