As per a report by CNBC, China’s mergers and acquisitions landscape is beginning to rebound after several years of decline, thanks to the impact of government stimulus measures and pressures from tariffs imposed by Donald Trump, which are driving industry consolidation.
Throughout most of 2024, China’s M&A activity was on a downward trend for the fifth consecutive year. However, the last quarter of the year saw a surge, with deal values soaring 78.5% to $129 billion from the previous quarter’s $72 billion, as reported by Dealogic. Industry experts anticipate further growth in deals.
Vivian Wong, head of M&A Analytics at ION Analytics, noted that policy-driven stimulus measures introduced in late September played a role in boosting deal activity in the final months of 2024. These initiatives aimed at consolidating domestic industries to strengthen competitiveness amid China’s slowing economic growth.
Since 2020, China has experienced a declining trend in M&A volume, with the total value of deals in 2024 about 45% lower than the $553 billion recorded in 2020.
The declining trend was largely attributed to weak economic activity and bearish sentiment, according to Theodore Shou, chief investment officer at Skybound Capital. Chinese companies’ cautious approach also reduced interest in private market transactions over the past years.
Meanwhile, Zhe Yu, a partner with the Shanghai-based Zhong Lun Law Firm, predicts a notable increase in M&A activity involving China in 2025.
Stanley Lah, Deloitte’s APAC M&A Services Leader, stated that the majority of upcoming mergers and acquisitions will focus on domestic deals rather than cross-border ones. This perspective is shared by Shou, who believes that foreign interest in acquiring Chinese businesses has not yet rebounded.
Yu noted that cross-border M&A in the high-tech sector is unlikely due to geopolitical issues. Nevertheless, Shou mentioned that Chinese firms might step in to rescue struggling foreign counterparts via mergers or acquisitions.
Domestically, some Chinese businesses might pursue joint ventures to tap into new markets. Sectors that are currently thriving, such as technology and green energy, are expected to attract significant investment.
