China: looking for partnerships, not just assets
China spent a third less on M&As in January 2017 than it did in the corresponding month in 2016. Analysts MergerMarket explained: “In a bid to reduce capital flight the Chinese government took a U-turn in financial policy, pledging to crack down on outbound deals worth more than $2 billion. This move is likely to result in more modest deals in 2017, although the appetite for investment remains.” 
Chinese companies also have to show that they are not simply grabbing assets but are creating partnerships with overseas companies – making the need for cultural understanding more important than ever.
Jianyong Wu, partner at Grant Thornton in China, says: “While the global economic outlook is uncertain, there are still a lot of Chinese companies looking for opportunities. They just have to consider integration and synergies from very early in the process."
Wu adds that he advises Chinese acquirers that they don't need to be the major shareholder and that they don't need to send 20-30 people to work with the new management team. “Four or five is enough. They acquired the company because they thought it was good enough,” he says. “It is about creating international companies, not Chinese companies.”
He also advocates bringing key members of the target management team; particularly if they are from Europe or the US, to China to better understand the Chinese culture.
The change could mean that China, from leading the world in the volume of acquisitions, soon leads the way in showing how a partnership approach is the key to successful M&As.