In the first half of 2018, China’s foreign direct investment grew steadily. According to data from the Ministry of Commerce, in the first half of 2018, Chinese investors conducted non-financial direct investment in 3,617 overseas companies in 151 countries and regions, with an accumulated investment of 57.2 billion US dollars, an increase of 18.7% over the same period of last year. Main investment industries were leasing and business services, manufacturing, mining, and wholesale and retail. Among them, Chinese enterprises increased their investment in the 55 countries of “One Belt, One Road” by 7.4 billion US dollars, a increase of 12% over the same time in last year, accounting for 12.9% of the total.
In the first half of 2018, the amount of overseas acquisitions by Chinese enterprises was 59.6 billion U.S. dollars. The decline in the first half of the year narrowed to 7.6%. Compared with the continuous decline in overseas M&A in 2018 Q1, in 2018 Q2, the amount of overseas M&A announced by the Chinese enterprises rose sharply to 45.2 billion US dollars, more than around the double, and 31% more than the same time last year.
In the first half of 2018, Chinese companies announced a total of 43 M&A transactions in the “one Belt, one Road” countries, accounting for 20.8% of the total transactions during the same period. The transaction amount of announced M&A amounted to 3.85 billion US dollars, down 60.8% year-on-year, accounting for 6.5% of the total.
In the first half of 2018, 60% foreign M&A by Chinese enterprises were in Europe, mainly to Portugal, Spain and Germany. In the first half of the year, half of the top ten countries in China’s overseas M&A came from Europe. The three most popular destinations were Portugal, the United States and Chile. At present, the uncertainty of Sino-US relations has caused some Chinese enterprises to hesitate to investing in the United States or to switch to Europe and other places. Due to the escalation of trade friction between China and the United States, and the US’s strict supervision of Chinese enterprises’ investment in the United States, in the first half of 2018, the number of M&A in the US fell by nearly 40%. On the other hand, the amount of Chinese companies’ M&A in Europe has risen by more than 40%, which is 4.5 times the amount in the United States.
(Source: EY China)