It has been a busy month for takeovers. On December 7, Lenovo announced it was taking control of IBM's PC business in a deal worth US$1.75 billion, attracting a flurry of international media reports as another example of the rise of 'Made in China'. The week before, Shanda Networking announced its plan to purchase 29% of the South Korea-listed Actoz Soft for US$91 million, finally clearing up the ongoing legal conflict between China and South Korea's largest online games operators.

In September, Shanghai Auto purchased a 49% share of Ssangyong, a South Korea-based truck manufacturer, for US$500 million, and is widely expected to flex its muscles further by taking control of MG Rover in the not too distant future. These follow on from last year's benchmark: the TCL purchase of France's Thomson to form the world's largest TV producer. The previous year BOE Technology purchased the flat panel display business unit of South Korea-based Hynix Semiconductor for US$380 million. There have been scores of similar transactions, dating back to and even before the pioneer in this field: Huali's 2001 purchase of Philips' CDMA R&D business unit.

Chinese companies in 2003 spent US$2.85 billion on purchasing overseas companies and other assets, according to statistics from the Minister of Commerce. The UN Trade and Development Report predicts that by the end of this year China will have replaced Japan as the fifth biggest global direct investor overseas.

We are entering a new era of cross-border M&A, a modern-day version of the Chinese folktale Journey to the West otherwise known as the Monkey King. Whereas the Monkey King's quest was to bring back Buddhist Sutras, the modern-day quest is for technology and new markets. It will be a tough journey, with numerous difficulties along the way. Are the M&A skills of China's entrepreneurs up to it? Is the transaction worth the price? Can the cultural gap be overcome? Will they be able to build global brands? The slightest mistake could cost them their success, as became apparent in the example of the D'Long Group, a trailblazer in crossborder M&A, but which came undone this Spring from broken cashflows amongst others.

In the book, the Monkey King is always under the control of a golden ring on his head. In my analogy, this golden ring is the Chinese Government. Though the government has loosened up, allowing overseas investment without first having to qualify for an official feasibility study, companies still have to seek the approval of the State Administration of Foreign Reserves before being allowed to remit monies abroad.

With clear targets, speedy action and boldness – all virtues possessed by the Monkey King – Chinese companies will find an effective solution to their quest for the modern-day equivalent of Buddhist Sutras, no matter the challenges. Expect to see many more Chinese companies looking to make acquisitions overseas, especially if – as is widely forecast – the Renminbi is to be revalued.