(Yicai) Sept. 8 -- Chinese companies are entering a “golden window” for cross-border mergers and acquisitions as their overseas expansion shifts from exports toward a more strategic approach, according to industry executives.

Demand for cross-border M&A among Chinese companies has begun to exceed demand for overseas listings, Crystal Zhang, managing partner of ARC Group, told Yicai recently at the Capital Markets and M&A Forum 2026: China Edition. The event, held in Shanghai, was hosted by the global investment bank and management consultancy.

“Cross-border mergers and acquisitions have just begun for Chinese companies,” Zhang said. Chinese firms seeking sustainable growth and expansion are increasingly looking overseas, with M&A providing one of the simplest and most direct ways to pursue strategic expansion, she added.

Chinese companies are also broadening their overseas expansion beyond product exports to include supply chains, business models and technological capabilities, while pursuing production capacity and intellectual property through acquisitions, according to industry executives.

Deal Value Rises

Global M&A value rebounded 47 percent to USD125.2 billion in the second quarter from a year earlier, according to ARC Group data. Although the number of transactions fell 13 percent, deal value jumped 47 percent, mainly driven by the increasing concentration of large transactions.

Cross-border M&A activity was particularly strong in Asia-Pacific’s mid-sized markets, where deal value rose 55 percent to USD2.6 billion, and the number of transactions increased 14 percent, the data showed.

Chinese companies announced USD21.4 billion of overseas M&A in the first half of this year, up 4 percent from a year earlier, according to data recently released by EY. Deal value exceeded USD10 billion for the third consecutive quarter.

“Going global for Chinese firms has entered a more systematic and large-scale stage from the exploration of a few companies,” Alex Pan, chief executive and founder of Cypress Capital, told Yicai.

In the past, overseas expansion was more about simple product exports and cross-border trade, but it is now gradually developing into “products going global, pipelines going global, supply chains going global” as well as business models and technological capabilities going global, Pan from the Hong Kong-based wealth management company noted.

Chinese companies in sectors including new energy, automobiles, consumer electronics, cross-border e-commerce and financial technology are taking their industrial chains, operational capabilities and even business models overseas, Pan added.

The structure and methods of cross-border transactions are also becoming more diversified as Chinese companies enter a new stage of overseas expansion.

In addition to traditional overall listings, mixed models involving industrial joint ventures, equity investment and technology licensing are increasing, ARC Group's Zhang said. Cross-border transactions are also becoming more concentrated by industry, with semiconductor, biopharmaceutical and new energy deals significantly more active than those in other sectors.

Transactions are increasingly moving in both directions, Zhang added, with Chinese companies seeking technology and markets overseas while foreign capital actively looks for opportunities to connect with China's competitive industries.

New Markets, New Challenges

Alongside this diversification, Chinese companies are becoming more strategic in what they seek from cross-border M&A.

Demand among leading Chinese companies for overseas expansion has risen significantly during the current golden window for cross-border M&A, as they seek to develop new regional markets for their products, particularly in renewable energy, healthcare and biotechnology, and industrial sectors, ARC Group partner Ou Jieyong told Yicai.

Chinese companies are also attempting to use cross-border M&A to acquire production capabilities and intellectual property expertise that complement their core products, Ou said.

Fast-moving consumer goods groups are paying close attention to acquisitions of clothing brands, particularly streetwear and outdoor apparel and equipment, which are among the main consumer trends at present, he added.

But executing cross-border deals remains complex for Chinese companies. Regulatory coordination across jurisdictions requires extensive preparation, while differences in valuation approaches and governance structures can complicate negotiations, Zhang said. And despite recent improvements in rules governing cross-border capital flows and foreign exchange management, companies still need professional teams to navigate the procedures required to complete deals.

Common challenges facing Chinese companies in cross-border operations also include insufficient advance planning of compliance structures, a relative shortage of professionals with expertise across multiple fields, and inadequate understanding of the regulatory environments in target markets, Zhang concluded.

Editor: Emmi Laine