The Transformation of Chinese M&A Wave in ASEAN

Abstract

The world has observed the rise of Chinese outward M&A activities in the past decade. These Chinese firms are expanding overseas; in the early stage, their M&A activities were mainly focused on gaining access to natural resources; as they advanced up along their value chains, their M&A activities have gradually moved toward gaining access to new market as well as advanced capability and technology. ASEAN is one of the region that has attracted incoming M&As from China. This study seeks to explain the M&A behaviour of Chinese firms in ASEAN. The paper collects primary data through semi-structured interviews with key informants. This primary information is supplemented by extensive data from secondary sources such as industrial reports and publicly available databases of international organisations. Despite the new trend of market, capability and technology-seeking M&As by Chinese firms, the majority of these M&As in ASEAN remains natural resource-seeking. This is due to the condition of ASEAN as region which is rich in natural resource but lack of large and mature consumer market as well as lack of advanced capability and technology. However, the investment has been anticipated to shift into the second-wave M&A. According to Chinese 13th Five-Year Plan and the increase of foreign aids to ASEAN region, future investments are likely to relate with technological innovation and infrastructure construction, peculiarly in logistics and transportation sectors.