China Transactions Insights – Fall 2021

China has stepped into the second stage of recovery from the COVID-19 pandemic as businesses and people returned to work, demonstrated by a 12.7% increase in GDP for H1 2021. The economy also recorded increases in industrial output (15.9%), retail sales (23.0%), foreign trade (27.1%) and property investment (15.0%) in H1 2021.¹

New policies and regulatory actions increasing scrutiny on offshore-listed Chinese companies have created uncertainty and weighed on the stock prices of many Chinese firms traded on U.S. exchanges.

Capital markets activity for Chinese companies has picked up since mid-2020 as markets rebounded from the initial impact of the pandemic. While IPO activity for Chinese companies in the U.S. and Hong Kong has been strong through August, uncertainty remains due to the potential for stricter policies and regulations for offshore listings.²

Going-private transaction deal value for U.S.-listed companies based in China could see an uptick in the months ahead, as companies with pending going-private proposals represented over USD 12 billion in total market capitalization as of August 31, 2021.²


Sources:
¹ China National Bureau of Statistics and China Ministry of Commerce
² SEC filings, company press releases and S&P Global Market Intelligence as of August 31, 2021