Experts say

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Bankers and analysts say mergers and acquisitions in China’s capital markets are expected to rebound from this year’s lows as the sudden growth of DeepSeek Press starts sudden growth in the technology sector.

PwC said mergers and acquisitions could grow at double-digit rates, while French investment bank Natixis said a 10% to 15% increase in bet would be a sure bet. The catalysts may come from demand for overseas investment by Chinese companies, private equity fund exits and restructuring involving Chinese state-owned enterprises, they added.

“DeepSeek has also had a huge impact not only in the technology sector, but also in the stock market, as it is changing the momentum in China,” said Miranda Zhao, head of M&A at Natixis Corporate and Investment Bank in Asia Pacific. She added that the first few months of 2025 have been one of the bank’s busiest people.

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Beijing has promoted protracted U.S. brokerage industry mergers or consolidated its business in recent months, resulting in several large mergers. Automakers controlled by some countries also want to combine competition in local markets with overseas tariff threats.

PwC said in a report that the value of mergers and acquisitions fell 16% last year to $277 billion, the lowest since 2014. It added that only 39 deals had exceeded $1 billion, the fewest in nearly a decade.

Sam Sze, head of PwC’s southern China consulting consultancy, said the ongoing reforms to state-owned enterprises could lead to large-scale transactions. He pointed out that there is also a greater appetite for regional mergers and acquisitions, especially in Southeast Asia, especially in areas such as technology, energy and power.

PwC said M&A deals have been growing steadily over the past two years despite the decline in value. It added that there were 10,654 deals last year, a 24% increase from 2023, driven by the activity of venture capital funds.

“High-tech and industrial M&A transactions account for 39% and 21% of transaction volume, respectively, indicating that there are a large number of small-scale transactions in the market, such as early stage financing in the AI sector,” the report shows.

This article was originally published in the South China Morning Post (SCMP), the most authoritative voice about China and Asia for more than a century. For more SCMP stories, visit the SCMP application or visit SCMP’s Facebook and twitter page. Copyright © 2025 South Chine Morning Posterment Ltd. All rights reserved.