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The State Council guidance said the securities regulator will offer supporting measures such as an IPO green channel for enterprises in poor areas. Photo: iStock

Over the first six months of 2018, the amount of M&A activity in China fell to US$348.3 billion, a drop of 18% compared to the second half of 2017, while the number of transactions saw minor growth, according to the latest report released by PwC, The Paper reported.

Liu Yanlai, PwC’s head of private equity transactions in China and Hong Kong, said that the main reason for the significant decline in value was the reduction in large transactions.

There were 24 large-scale transactions of more than US$1 billion, down from 32 in the second half of 2017.

In the context of tight liquidity amid the ongoing deleveraging campaign, enterprises pay more attention to their own development and strategic adjustment, putting fewer funds and attention on mergers and acquisitions, Liu added.

However, Tang Weiqing, chairman of Yicun Capital, believes China has a trillion-dollar M&A market. As long as an industry has not yet formed a giant conglomerate, then that industry will still have merger and acquisition space.