EY: no ‘significant bounce-back’ in M&A activity even though private equity is still ‘very positive’ about China; Japan, India to lead regional rebound
- China is going through a major transition in terms of its economy, but it will need to do this by itself, without a ‘helping hand from other advanced economies’ because of geopolitical tensions: EY’s Yew-Poh Mak tells the Post
- India and Japan are likely to emerge as the region’s winners due to lower geopolitical risks and favourable fiscal policy
Moreover, global private-equity funds are still “very positive” about mainland China, despite challenges ranging from geopolitical tensions with the West to regulatory uncertainties at home, with investors and businesses eyeing long-term opportunities in the energy transition, consumption, pharmaceuticals and technology sectors.
But while China is seeing strong growth momentum in several sectors, Mak said he did not expect to see “a significant bounce back” in terms of M&A activity, as the private equity industry – the main driver of deals – is still regaining momentum due to regulatory restrictions and a Covid-induced economic slowdown over the past two to three years.
“China is going through a major transition in terms of its economy, where it is [transitioning] from the manufacturing capital of the world into a very advanced economy,” Mak said.
“However, because of geopolitical tensions, China will need to do this transition by itself, rather than getting a helping hand from other advanced economies.”