"The first thing I wanted to do when I came back to China was junk bonds," said Mr Wang. "When I was studying in the US in 1987, I was so surprised by Mike Milken, the junk bond king. I was amazed how one person could make over $500m in a year." However, in spite of Mr Wang's efforts, Beijing was not enthused by the idea of high-yielding securities. "Nobody in the central government at that time understood what a junk bond was," he said.

But in that disappointment lay serendipity. Mr Wang began instead to develop an interest in mergers and acquisitions and, 12 years later, he has emerged as the leading light in this little-known aspect of China's business culture. Without fanfare earlier this year, Mr Wang, who heads his own private M&A firm, was chosen as the founding chairman of the China Mergers and Acquisitions Association, a body that reports to the All China Federation of Industry and Commerce, an official organisation.

Government approval for the association, which derives eight of its 40 corporate members from Hong Kong, was a milestone in China's economic reform. In the past, M&A activity had been regarded with some suspicion by Beijing officials fearful that state assets could pass too cheaply into private hands.

The creation of this association provides a clear indication that M&A is moving into the mainstream of Chinese business. It has come just as Chinese companies are intensifying their search abroad for M&A deals to expand their global reach.

Mr Wang said the association would act as a platform providing information and contacts for both foreign companies interested in investing in China and Chinese groups eager to go abroad. In the next few weeks, senior association members will travel to Japan for conferences in Tokyo and Osaka with about 200 Japanese companies.

Plans are under way for a similar conference in Argentina, a country with many of the mineral and agricultural resources China needs.

"If there is a single firm going to Argentina looking for merger and acquisition activities, they don't have influence," Mr Wang said.
"But if there is a group like the China Mergers and Acquisitions Association, then we can arrange a forum where many people can meet." China M&A, a private company established by Mr Wang in 1996, is also trying to burnish its international connections.

Michael Speissbach, a US private equity financier with China experience, has taken a "significant" minority stake in China M&A and has been made vice-chairman to Mr Wang. Mr Speissbach's role will be to help China M&A run a fund of foreign money intended for direct investment in Chinese corporations.

As the first purely M&A-focused company in China, China M&A enjoys a considerable reputation within the mainland and is approached regularly by Chinese companies that wish to merge, sell off a strategic stake or be acquired by other Chinese or foreign entities.

However, many of these prospective clients are turned away. "We are very picky. We have to make our deals successful for the sake of our reputation," said Mr Wang. "We mostly go after companies [to persuade them into a deal]. When they come to us, many are not real."

The wall in Mr Wang's office is studded with plaques showing deals in which he has participated. One involved Lafarge, the French cement group, another Philips, the Dutch electronics company.

Many others were between private Chinese companies buying state-owned counterparts.

Although the number of M&A deals is rising steadily year on year in China, the market remains immature and fraught with difficulties, especially for foreign corporations.

For example, the State Assets Regulatory and Management Commission, the government body that regulates the sale of state companies, remains ambivalent about letting state assets slip into private or foreign hands, observers say. The commission has a rule that state assets must not be sold at below their net asset value, a prohibition that complicates the sale process.