China Transactions Insights - Spring 2020

China Transactions Insights - Spring 2020

The coronavirus pandemic severely disrupted Chinese businesses during the first few months of the year, as demonstrated by a 6.8% decline in China’s GDP for Q1 2020.

China also recorded declines in industrial output (-8.4%), retail sales (-19.0%), foreign trade (-6.4%) and foreign direct investment (-10.8%) in Q1 2020.1 However, as many Chinese businesses, factories and people return to work, economic indicators and financial markets are beginning to show signs of recovery.

China Transactions Insights - Spring 2020

Capital markets activity for Chinese companies also felt the impact of COVID-19, as market volatility and uncertainty slowed the pace of both U.S. and Hong Kong IPOs of Chinese companies through the first four months of the year.2

Going-private transaction activity for U.S.-listed companies based in China remains below the peak level seen in 2016. However, 2020 has the potential for a substantial uptick in deal value, as companies with pending going-private proposals represented approximately USD 13 billion in total market capitalization as of May 7, 2020.2


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 May 7, 2020

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