Value of U.S. deals in China declines

Updated 2017-08-02 10:01:05 Global Times

The value of U.S. deals in China declined in the first half of 2017, which partly shows that China is making more efforts to fight monopoly practices and better regulate the market order, experts noted on Tuesday.

Merger and acquisition (M&A) deals involving U.S. participants in China declined 32 percent to 3 million in the first half of 2017, Thomson Reuters data showed on Friday. The value of deals was down 87 percent from billion in 2015.

The declines were caused by several factors. "China is becoming more cautious about acquisitions related to financial security and monopoly practices, which could better regulate the market order," Bai Ming, a research fellow at the Chinese Academy of International Trade and Economic Cooperation under the Ministry of Commerce, told the Global Times on Tuesday.

Also, domestic high-technology companies are getting better at developing their own technology, so they are reluctant to merge with overseas companies, said Bai. "Companies like Huawei are capable of developing their own business strategies both at home and overseas," noted Bai.

However, the data is only "a reflection of a certain period," so it is hard to say the decline will continue, Jing Linbo, director of the Chinese Institute of Social Sciences Evaluation Studies at the Chinese Academy of Social Sciences, told the Global Times on Tuesday.

Jing stressed that the Chinese government has always encouraged more overseas investment, and the policy will not change.

On Friday, Premier Li Keqiang said at a State Council executive meeting that the country aims to attract more foreign direct investment by widening market access and improving the business environment.

The Trump administration is calling for a strategy of "Made in America" to support the U.S. manufacturing sector, which is another reason leading to the decline of outbound investment for U.S. companies, Jing said.

Most U.S. companies recorded good performances in China in 2016. According to a report released by the American Chamber of Commerce (AmCham) in Shanghai, about 73.5 percent of its member companies reported revenue growth in 2016, up from 61 percent in 2015, with the retail and services sectors performing particularly well.

AmCham has 3,200 registered members.

Most member companies in the AmCham survey were profitable in 2016, led by sectors including non-consumer electronics and the life sciences industry.

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