China’s mergers and acquisitions (M&A) market is poised for another year of growth as investors regain confidence in the country’s assets and long-term growth prospects, and look beyond geopolitical and economic headwinds, according to industry experts.
Investor optimism in 2026 would build on a deeper understanding of risks associated with regulatory restrictions, improved market conditions and success stories in the past year, said Kevin Yu Zhe, Shanghai-based partner at Zhong Lun Law Firm.
“It’s interesting to note how investors display a renewed sense of confidence in their ability to achieve synergy and elevate target businesses, even amid the complexities of geopolitical dynamics and macroeconomic challenges,” Yu said. “This shift in mindset could lead to a wave of strategic deals aimed at growth and resilience in the face of ongoing global challenges.”
M&A activity in the world’s second-largest economy rebounded steadily in 2025 after a difficult period, with deal value expected to rise 13 per cent to about US$406 billion, according to a recent report by Bain & Co.
Strategic deals climbed 27 per cent year on year to US$301 billion as of November 25, while the number of transactions larger than US$30 million increased by 24 per cent. Financial investor-led deals surged 89 per cent during the period, though they remained a smaller contributor to the overall tally.
Private equity funds have been able to recycle capital and return cash to investors through exits in Hong Kong’s rebounding initial public offering market.
