China's M&A Activity Responds to Trump Tariff Threats

China's stock market has seen slight gains as Hong Kong shares recover from two-month lows amidst tariff threats from U.S. President-elect Donald Trump, who plans to impose an additional 10% tariff on Chinese goods. This comes as Trump blames China for the influx of fentanyl into the U.S. and anticipates potential tariffs of 60% or more. Analysts predict a rise in Chinese outbound mergers and acquisitions (M&A) as companies seek to reduce reliance on U.S. markets due to the looming trade war, although inbound M&A prospects appear bleak. The uncertainty surrounding tariffs could lead to a significant GDP loss for China, estimated at 2.5% if higher tariffs are enacted. Despite high interest rates and geopolitical tensions impacting the global M&A landscape, sectors like manufacturing and technology may see renewed activity. Chinese firms are adapting by accelerating their globalization strategies in response to these challenges.