China's Deal-Making Surges Amid Trump Tariff Threats and Economic Shifts

19 Feb, 2025

China’s mergers and acquisitions (M&A) market is witnessing a rebound after years of decline, driven by government stimulus measures and industry consolidation amid Donald Trump’s tariff threats. In 2024, M&A activity was set for a fifth consecutive year of decline until the final quarter saw a sudden surge. Deal values jumped 78.5% to $129 billion from $72 billion in the previous quarter, according to Dealogic data.

Industry experts predict further acceleration in deal-making. The fourth-quarter uptick was partly due to stimulus measures introduced in late September, said Vivian Wong, head of M&A Analytics at ION Analytics. These policies aimed to consolidate domestic industries, improving China’s economic competitiveness.

Since 2020, China’s M&A volume has been steadily declining. The total deal value in 2024 was approximately 45% lower than the $553 billion recorded in 2020, as per Dealogic. Weak economic conditions and bearish market sentiment contributed to this trend, according to Theodore Shou, chief investment officer at Skybound Capital.

Additionally, the conservative approach of Chinese corporations led to reduced interest in private market transactions in recent years. However, with renewed government support and external trade pressures, deal-making activity is set to gain momentum, marking a potential shift in China’s investment landscape.

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