What do you want for Christmas? Cow tongue cookies, a diamond ring or life insurance?

Posted by Joel

I have received some bizarre gifts during my time in China. I once bit into what I thought was a butter cookie that a friend gave me only to find it was stuffed with meat instead of chocolate. On another occasion a good friend in Taiwan gave me a package of cow tongue cookies (which to my surprise did not contain any actual cow tongue). One of my favorite gift exchange moments happened in Taiwan when my friend Zach received an assortment of twenty different canned fish (he also is deathly allergic to seafood). ç¤¼è½»æƒ…è°Šé‡ Itâ€™s the thought that counts, right? What got me thinking about these out of the ordinary gift exchanges was this article that I read in the New York Times a few weeks ago. It highlights a recent New York Life insurance ad campaign:

This Christmas New York Life seeks to tap into Americanâ€™s fears by the current financial crisis. If you buy your wife a diamond ring, then it shows you will always love her, but if you buy her life insurance then you can finally prove to her that she is worth more to you â€œthan anything else in the entire world.â€

Will Chinese insurance companies also try to transform the international financial crisis into an opportunity to win big? This past week there were rumors in the air that China Life Insurance Co. (NYSE: LFC) might possibly buy AIGâ€™s Asian assets. China Lifeâ€™s Vice President, Miao Jianmin, denies these rumors. Perhaps China Life is weary of international acquisitions after the recent foreign investment failure of Ping An Insurance, another Chinese insurance provider.

In November 2007, Ping An Insurance, the second largest Chinese insurance provider, purchased a roughly 4% stake in Belgo-Dutch Fortis Investments. By March of this year, Ping An went even further and bought a 50% stake in Fortisâ€™ asset-management unit for 2.15 billion euros ($3.36 billion).

Nearly one year after Ping Anâ€™s initial investment, the Belgium government dismantled Fortis. Ping An subsequently lost 15.7 billion yuan ($2.3 billion) as a result of Fortisâ€™ failure and is currently seeking Chinese government assistance to secure compensation from the Belgium government under the Chinese-Belgium trade treaty.

A host of companies are in dire need of strategic investment to keep them afloat in the current tumultuous financial environment. Without a doubt Chinese domestic enterprises can position themselves to capitalize on this opportunity and acquire foreign firms. However, they should do so with caution. As the Ping An-Fortis case shows, a failed opportunity to gain a foothold overseas can easily become a major setback to the domestic firmâ€™s long-term strategic goals.
What do you think? What are your predictions for possible Chinese acquisitions of foreign companies? Who will benefit the most?

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