Chinese companies' overseas mergers and acquisition (M&A) activity saw a rapid increase in the number of deals and the amount of investment last year, buoyed by domestic companies' pursuit of industrial upgrading and the "Belt and Road" (B&R) initiative, Rupert Hoogewerf, chairman and chief researcher of the Hurun Report, told a press conference on Tuesday in Beijing.
In 2016, the number of M&A deals by Chinese companies surged 21 percent year-on-year to 438, with investment up 148 percent to $215.8 billion, said a report jointly released by the Hurun Report and consulting firm DealGlobe on Monday.
Chinese companies' investment in overseas markets was concentrated in areas such as manufacturing, financial services and health, said the report.
Private companies as well as private equity and asset management firms are engaging more in overseas M&A deals, the report noted. For example, private firms and asset management firms represented 66 percent and 21 percent, respectively, of the investors who moved into overseas market last year.
By comparison, State-owned enterprises' share of the total investors was 13 percent.
"The desire for advanced technology and industrial upgrading, which is vital to domestic companies' organic growth in the long term, was a major driver in the increase of M&As last year," Feng Lin, CEO of DealGlobe, said at the press briefing. That's the reason why advanced economies such as the US, Germany and France were the top five destinations for Chinese capital, he said.
The B&R initiative has also been a policy boon for domestic companies, allowing them to export their own technology and develop overseas markets, Hoogewerf said. Feng warned that as the government tightens supervision of overseas M&A deals and domestic capital outflows, the trend will slow in 2017.
