At the annual Global Investment Conference held in New York earlier this month, scholars, company executives, and investors gathered to exchange their views on a plethora of topics pertaining to global investment trends and challenges in China. One such topic was the spike in the total value of mergers and acquisitions (M&A) by Chinese companies in the first nine months of 2016, which had already outpaced the previous year’s M&As by 68 percent, placing it at a value of $173.9 billion. This trend was also notable because it marked the first time that China had completed more deals than the United States.
As Director of the Center for China Financial Research at CU Denver’s School of Business, and one of the leading experts in his field, Yang was sought out by China Daily to comment on the current phenomena occurring within the country and what the future likely holds, “In 2017, we can expect continued strong outbound M&A activity by Chinese firms and generally a continuation of several target sectors for Chinese acquirers,” adding, “Technology and financial services probably will continue to be among the most favored sectors for outbound acquisitions by Chinese companies. It remains to be seen whether the hospitality industry will still be a favorite target in 2017.”
Yang also touched on the political implications of China’s growth in outbound M&A activity, given that US companies are one of the largest acquisition targets for the country. Yang noted that an increase in political risk is possible in the US which could negatively affect deals between the two countries, especially within the technology sector, an area that could fail a national security review conducted by the inter-agency Committee on Foreign Investment in the United States. “If such an experience becomes more common and frustrating to Chinese acquirers,” said Yang, “they probably would be less willing to initiate M&A deals for US companies in the future.”
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