Deloitte says Chinese companies can continue to count on outbound investment to move up the value chain

Published: 7 September 2016

More than 250 business executives attended the Outbound Investment Forum organized by Deloitte Global China Services Group on 6 September, in which the Deloitte economist and investment experts from over 30 countries were able to engage in discussion with audiences on best practices and prevailing opportunities in overseas investment.

For the past five years, there has been a rapid increase in China outbound investment (both M&A and FDI); the momentum of which will continue in the run up to 2020 and beyond, without being affected by global economic slowndown. Deloitte believes that Chinese companies can continue to count on outbound investment as they seek to move up the value chain and realise their vision of globalisation. While outbound M&A is one of the viable routes for Chinese companies to expand their business and tap the international market, Chinese investors need proper planning to reap the full benefits and to overcome the different challenges, such as cultural difference, regulatory issues and business norms.

"Although China is now adapting to a more moderate growth, which many describe as the 'new normal', it continues to play an important role in shaping the global economic landscape. As part of their corporate development journey, many Chinese companies are seeking for overseas expansion to lead the way in growth opportunities, and there are a number of government supported campaigns, such as 'The Belt and Road Initiative'," said Rosa Yang, Chairman of the Global China Services Group, Deloitte.

The Deloitte Outbound Investment Forum followed its annual Global Chinese Services Group (CSG) meeting, which brought together over 140 Deloitte professionals from 30 countries to discuss how to better support Chinese companies in their global expansion. “Chinese companies have remained aggressive in overseas investment, with outbound M&A transactions reaching a total amount of US$265 billion in the first seven months of this year, equivalent to 75% of the aggregate deal value in the previous year. So far, China investors tend to focus on the infrastructure, advanced technology and manufacturing sectors. In the future, however, there will be a rapid growth of M&A deals in the life science, environmental technology and cultural sectors,” said Jimmy Chan, Deloitte China M&A Corridor Leader.

"Over the years, Deloitte has supported many landmark transactions, which supports the globalisation of Chinese companies. In 2016, for instance, Deloitte assisted a state-owned, Global Fortune 500 chemicals company in the largest ever Chinese outbound M&A transaction to acquire a global agrochemical and seed producer in Switzerland. Our Forum aims to provide insights for Chinese enterprises in their overseas investments, drawing on the experience and expertise from our Deloitte Global network. It also provides participants with a platform for networking and sharing views and ideas related to outbound investments," Yang added.

Deloitte’s CSG practice has active teams in over 60 countries around the world equipped with dedicated professionals who are privileged in serving Chinese companies in overseas with their Chinese language speaking ability and culture understanding, ready to serve Chinese outbound investors.