China’s M&A activity to rebound next year, helping boost global deal flow to US$3.2t
Beijing to ‘green light’ more overseas investments by Chinese companies as stable yuan dampens concerns of capital outflows
Beijing’s relaxation on foreign ownership in financial joint ventures and its push on New Silk Road projects is set to boost mergers and acquisitions next year, amounting to global deals potentially worth US$3.2 trillion, up 23 per cent from this year’s expected total, according to international law firm Baker McKenzie.
Mergers and acquisitions in China will grow to US$278 billion in 2018, reflecting a gain of 16 per cent from US$240.2 billion in 2017, according to the law firm.
Thanks to a relaxation of rules on foreign investment, investors purchasing stakes in mainland companies is expected to grow to US$47.9 billion in 2018, up 73 per from US$28.1 billion in 2017, the law firm said.
China announced on Friday it would eliminate ownership caps on joint ventures in the financial services sector in five years.
China’s outbound investment dropped 30 per cent in the first nine months this year to US$118 billion after Beijing tightened rules in an effort to curb extravagant investment by Chinese companies overseas. Baker McKenzie believes a policy U-turn will be unveiled next year as the strengthening of the yuan reduces the need for administrative curbs on capital outflows.
