A new study has showed China’s acquisitive activity in Europe cooled last year from a recent splurge by corporations looking to expand their portfolios after the government enacted measures to limit outbound capital flows.
The study, conducted by Spanish business school Esade, reported that acquisitions by Chinese companies in the EU fell to $30 billion in 2017 from the record $41.2 billion in 2016.
“There was a significant drop in investment operations considered to be ‘irrational,’ i.e. outside of the government’s priorities,” the report read. “In particular, there was a significant decline for deals in the entertainment, sport and real-estate sector, some of the sectors most favoured by Chinese companies in the last two years.”
As Bloomberg notes, the slowdown in takeovers could continue as major European economies are becoming warier of the nature and implications of large-scale Chinese investment, particularly with respect to technology industries such as electric vehicles, biotechnology and fintech.