Chinese acquirers will spend $1.5 trillion buying companies abroad in the next decade, 70 percent more than the previous 10 years, even as regulators at home and abroad block deals, Linklaters LLP said in a report Tuesday.
Government policies encouraging Chinese companies to invest in manufacturing capabilities, particularly for advanced technology, and international trade will help maintain deal flow, the law firm, which specializes in advising on mergers and acquisitions, said in the report.
Chinese buyers have spent about $880 billion on assets in other countries in the last 10 years, according to the data.
The success of China’s bidders will depend on their ability to overcome foreign countries’ concerns about national security and interest, which contributed to the failure of as much as $75 billion in announced outbound deals last year, Linklaters said in the report.
China may also have to bow to international pressure to liberalize its markets, it said.
“While the pace of outbound deals has declined in 2017, China’s long-term aspirations” mean that overseas “investment and acquisitions from China will continue to be a significant force over the long term,” Linklaters said.