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China Deal Watch

Chinese companies have been buying up assets all over the world. This graphic, updated weekly, takes a close look at what China is acquiring, and where. The numbers reveal a lot about the country’s global ambitions.

On Dec 1, China’s Poly Real Estate Group Co Ltd agreed to buy a minority stake in Poly Hong Kong Holdings Ltd for $360 million. Here’s how this deal compares to China’s other overseas acquisitions this year:
Rank 75th largest foreign acquisition by a Chinese company this year
2017 Total $158.1B in foreign mergers and acquisitions
Change -31% from the same period in 2016

Chinese companies continue to seek deals after last year’s record acquisition spree, when they announced nearly $250 billion of foreign purchases. The nation’s overseas dealmaking started as a hunt for the raw materials needed to feed steel mills, support industrial production and keep the nation’s factories humming—the so-called old economy.

As China grew, so did its appetite for foreign acquisitions. They’ve shifted focus to acquiring the brands and technology China needs to transition to an economy driven by domestic consumption more than exports, labeled here as the new economy.

As China’s dealmaking exploded, the types of companies it’s buying have changed. That change is easy to spot when you look at the industries of the target companies.

Before 2013, China’s overseas dealmaking was dominated by state-owned companies acquiring iron ore deposits in Australia, energy producers from Canada and copper mines in Africa. More than half of the purchases were of energy and commodities companies. Now private entrepreneurs are snapping up marquee assets like Italian football teams, American film studios and French fashion houses while government-backed buyers purchase chipmakers and crop technology. For a better sense of how China’s targets have changed, let’s look at annual deal volumes by industry.  

Favorite destinations

The charts below show China’s favorite destinations have shifted over time. Every deal of at least $100 million since 2006 is displayed.

Traditional energy
China has made energy acquisitions across the world, with the biggest being Cnooc Ltd.’s 2012 agreement to buy Canada’s Nexen Inc. for $14.3 billion following smaller deals in Central Asia, Europe and South America.

What’s next?

The growing number of deals has attracted close government scrutiny within China and around the world. Several roadblocks have started appearing that are slowing the pace of acquisitions:

Factors
Reasons
Measure
Measure
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Summary | 6 Annotations
They’ve shifted focus to acquiring the brands and technology China needs to transition to an economy driven by domestic consumption more than exports, labeled here as the new economy.
2016/10/24 07:41
Before 2013, China’s overseas dealmaking was dominated by state-owned companies
2016/10/24 07:42
Now private entrepreneurs are snapping up marquee assets like Italian football teams, American film studios and French fashion houses
2016/10/24 07:42
how China’s targets have changed, let’s look at annual deal volumes by industry.  
2016/10/24 07:42
Can China keep buying at this speed?
2016/10/24 07:43
The short answer: yes
2016/10/24 07:43