On 8 May 2023 EY Greater China region releases the Overview of China outbound investment of Q1 2023.  The report shows that China overall ODI remarkably increased 18% YOY to US$40.5 billion in Q1 2023^[1]. However, the announced China overseas M&A activities continued to be sluggish, with announced deal value reaching a recent quarterly low of US$3.5 billion, down 26% YOY. Asia remains the most popular destination for overseas M&As^[2].

“Amid the volatile international financial market in Q1 2023, the global economy was projected to increase 2.8%^[3]. Inflation pressure appeared to have eased from previous heights among advanced economies. Yet, the gap from the target level is still there and, therefore, interest rates among key economies might be kept relatively higher in the near term and the global economic downward pressure might continue. In addition, the fragmented impact of geopolitical risks on investment and economic output is expanding, posing challenges for Chinese enterprises going abroad. On the other hand, China’s economy has shown signs of recovery this year, with consumption growth turning positive, foreign trade improving month by month, and ODI recording a significant YOY growth in Q1. With the steady economic development of China in Q1 and the promotion of high-level opening-up, the momentum of China outbound investment is expected to further increase. Moreover, the high-level interactions between China and many countries in the early 2023 may also provide increased direction and opportunities for Chinese enterprises seeking overseas development.”  – by Loletta Chow, Global Leader of EY China Overseas Investment Network

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1. Source: China MOFCOM
2. Sources: Refinitiv; Mergermarket, including data from Hong Kong, Macau and Taiwan, and deals that have been announced but not yet completed, data was downloaded on 3 April 2023; EY analysis
3. Source: World Economic Outlook, IMF, April 2023

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