Regulatory, geopolitical uncertainties cloud M&A activity in China: Deloitte
- Investors are not sure about the economy, confidence is not high and they want the Chinese government to take steps to drive growth, Deloitte’s Stanley Lah says
Regulatory changes and geopolitical shifts are the two biggest disruptive forces and risks affecting M&A, according to company heads surveyed by the consultancy.
Geopolitical tensions can delay or derail deals as companies struggle to assess risks and align their strategic objectives in rapidly changing conditions, the report added.
“Uncertainty is a big word, and [it] has been affecting confidence,” said Stanley Lah, strategy and transactions national leader at Deloitte China. “The main factor is investors are just not sure about the economy, confidence is not high and they want to see the steps [China’s] government will take to drive economic growth.”
China’s slowing economy is proving to be a drag on consumer sentiment and business confidence. The economy continued to be weighed down last month by a persistent property slump, weak consumption and elevated unemployment.
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The slowdown has been reflected in deal-making. In the first half of 2024, M&A volumes and values in Asia-Pacific decreased by 17 per cent and 32 per cent, respectively, compared with the first half of 2023. Deal volumes in China declined by 19 per cent.
