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Down, but not for long - China outbound M&A

12 December 2017 | China
Legal Briefings

In 2016, China’s outbound investment surged, reaching a record high  of US$170.1 billion, and surpassed inbound investment for the first  time. Investment came from all types of Chinese companies, from state-owned enterprises to privately owned innovators, and in everything from chemical companies to football clubs.

Not everyone was pleased. The rapid  drop in China's foreign exchange reserves and rise in risky state-owned bank lending that accompanied this boom resulted in a regulatory backlash against “irrational” and “non-genuine” outbound transactions.

As a result of various responses to this alarming drop, China’s non-financial outbound investment fell in 2017, and stood down year on year by 41% to US$81 billion at the end of October.

However, the somewhat kneejerk reaction to 2016's capital outflows has developed into a much more transparent policy and procedures for Chinese outbound deals.

By Karen Ip, Matt Emsley, Nanda Lau and Tommy Tong

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Cross border M&A hub