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Chinese financial M&A remain buoyant in 2016: Report

Xinhua | Updated: 2017-02-27 14:39

BEIJING - China defied a broader regional trend in mergers and acquisitions (M&A) in the financial sector last year, according to a report.

Chinese companies made M&A deals worth $25 billion in 2016, up 13 percent, while total transactions in the Asia-Pacific fell 38 percent, according to a report by Deloitte.

Jonathan Daniel, head of portfolio lead advisory services, Japan, Deloitte Tohmatsu Financial Advisory, described 2016 as a year of volatility, exacerbated by unexpected events, such as Brexit, the outcome of the US presidential election, and continued slowing in the Chinese economy.

China was again the most active country in terms of deal value, followed by the Republic of Korea and Thailand.

In terms of a destination for foreign investors, China replaced Indonesia as the most appealing market.

"In 2016, Chinese M&A activities were in part energized by the country's Belt and Road Initiative. Chinese investors were not only active in acquiring business in the financial services sector, but also in other industries, including energy, manufacturing, infrastructure, information, technology and software," said Rosa Yang, Deloitte global Chinese services group chairman.

Looking ahead, the report predicts that 2017 is likely to be another year of economic and political vagaries.

Patrick Yip, national M&A leader, Deloitte China, said in the short term, Chinese investors may take a wait-and-see approach towards outbound M&A given current political and economic uncertainties.

In the long term, however, Chinese companies will continue to acquire strategic assets overseas because of their need for diversification, supported by the Belt and Road Initiative, Yip added.

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