China's outbound M&A spree has staying power
19/05/2026 13:00
The author is a Reuters Breakingviews columnist. The opinions expressed are his own. By Ka Sing Chan HONG KONG, May 19 (Reuters Breakingviews) - Chinese acquirers are staying under the radar. Buyers led by the $50 billion miner, Zijin Gold 2259.HK, have pushed outbound M&A deals to a five-year high. That's well below values seen in 2016, when a raft of high-profile takeovers prompted a backlash by Beijing. Even so, today's less flashy deals, many tied to the government's strategic priorities in energy and supply chain security, look more sustainable. Overseas purchases by Chinese firms hit $9.6 billion in the first quarter of 2026, according to research group Rhodium, the highest since early 2021 and up for a fifth straight quarter. Mining and energy led the surge: Zijin’s $4 billion takeover of Canada’s Allied Gold AAUC.TO in January is the largest so far this year. The current boom is a far cry from a decade ago, when the likes of Anbang, HNA and Dalian Wanda splashed out more than $200 billion for mostly trophy assets, from New York’s iconic Waldorf Astoria hotel to Italy’s Inter Milan football club. At the time, those companies were hoping to extend their global reach to match the country's rising economic clout. But regulators soon cracked down amid concerns over debt and capital flight. Both Anbang and HNA have since undergone massive bankruptcy and restructuring. Zijin and peers are on firmer footing today. They are helping Beijing channel capital towards strategic sectors aligned with national priorities in supply chain and energy security. It echoes attempts by state-backed giants such as the Aluminum Corporation of China, or Chinalco, in the 2000s to acquire natural-resource assets, including high-profile bids for companies like Rio Tinto RIO.AX, RIO.L. Geopolitics, though, will make it tricky to hunt for large targets in developed markets, with Washington and other Western governments stepping up scrutiny of capital from the People's Republic. The bulk of China's first-quarter transactions were in Asia and Africa, per Rhodium. That may not matter too much. Momentum is building thanks to China's flagship overseas infrastructure and trade programme known as the Belt and Road Initiative. Non-financial investment in those mostly developing countries, which includes outbound M&A, has more than doubled since 2020 to nearly $40 billion last year, according to the Ministry of Commerce. Deals such as Geo-Jade Petroleum’s $3.9 billion investment in Kazakhstan’s Sozak gas project and CHN Energy’s $1.1 billion partnership to develop wind and solar farms in the same country underscore the shift. While this wave of Chinese deals is less likely to grab headlines, it looks more durable than last time. CONTEXT NEWS The value of China’s outbound merger and acquisition deals has reached $9.6 billion in the first quarter of 2026, according to Rhodium Group's China Cross-Border Monitor, representing a five-year high. This compares with $23.7 billion for the entire year of 2025. China’s non-financial foreign direct investment in Belt-and-Road countries, which includes outbound mergers and acquisitions, has more than doubled since 2020 to $39.7 billion in 2025, according to the Ministry of Commerce. China outbound M&A is still well below the 2016 peak https://www.reuters.com/graphics/BRV-BRV/zdvxgbnezpx/chart.png (Editing by Robyn Mak; Production by Ujjaini Dutta) ((For previous columns by the author, Reuters customers can click on CHAN/ KaSing.Chan@thomsonreuters.com))