Hong Kong has an important role to play in merger and acquisitions (M & A) by foreign investors in the Chinese mainland, according to a recent study by global accounting firm PricewaterhouseCoopers (PwC).

The PwC study showed 74 per cent of respondents believe Hong Kong could retain its pre-eminent role as the conduit and channel for foreign investment in the mainland in the next three years.

“The SAR's sound legal system and financial structure are factors which would allow Hong Kong to act as a gateway for foreign investors to carry out acquisitions in the mainland,” said PwC’s corporate finance leader Christopher Chan.

The survey conducted with 232 corporate investors and venture capitalists was based on their views of M & A activities in China and Asia for the next 12 months.

The PwC report also pointed out that although investors will have more confidence to invest directly into mainland cities in the longer term, “our own view is that Hong Kong will continue to play an integral role in the future development of the mainland”.

The survey findings showed 58 per cent of respondents believed there would be more
M & A activities in Asia in the next 12 months, while 70 per cent expected more merger and acquisitions will take place in the mainland.

PwC partner Jim Woods said China had promising prospects for foreign investors considering a takeover deal as the mainland had begun to open its markets following its accession into the World Trade Organisation.