Voice from China

Quarterly update on the M&A market in China

China’s GDP grew by double digits during the first quarter of 2021, as the country’s economy showed a strong return to form following the challenges of the pandemic. During the same period, China attracted significant inbound investment although outbound cross-border transactions fell in the face of travel restrictions and the complex geopolitical situation. Angela Chen, principal at Oaklins HFG China, examines national and international factors that may impact investment opportunities going forward.

 

We explore ways that M&A in China is being encouraged by official policies and the continued interest shown by Chinese companies in investing in Europe, despite restrictions on direct foreign investment being introduced in some countries.

In addition, we take a closer look at the low-voltage (LV) electrical components sector; the world’s largest industrial cluster of LV electrical component producers is found in the Chinese city of Wenzhou, a concentration that creates important advantages. Among the themes we cover are the highly competitive LV component market, which is made up of three groups of players, and market trends, including consolidation and growing demand for high-end products. A case study looks at the strategic investment by Eaton, a diversified power management company with 100 years of history behind it, in HuanYu High Tech Co., part of the HuanYu Group, a leading Chinese LV electrical equipment manufacturer.

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Angela chen new 2
Angela Chen Shanghai, China
Principal
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For more expert commentary on the M&A market in China, download the PDF below

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