EY: Chinese companies' M&A appetite highest on record

Chinese executives are more optimistic about global economic performance in the second half of this year than in the first six months, showing an increased willingness for mergers and acquisitions, a report released on Thursday shows.

EY's Global Capital Confidence Barometer report found 98 percent of Chinese respondents expect the global economy to grow or remain stable in the second half, compared with 94 percent in the survey for the first half.

"China is emerging as the (Asia-Pacific) region’s most attractive and active capital mover," the report said.

The report surveyed over 3,000 executives globally, with 192 from China.

A record 58 percent of the Chinese executives said they intended to actively seek acquisition opportunities in the next 12 months, up from 43 percent in the first half.

Erica Su, managing partner of Transaction Advisory Services at EY China, said the external environment — characterized by low interest rates, abundant cash and reserved M&A projects — boosted the appetite for investment.

Active investment by private equity funds is also driving the M&A market, Su added.

Only 4 percent Chinese respondents said they would have fewer M&A projects in the pipeline in the next 12 months, down from 23 percent in the first six months.

Companies see expanding market share, absorbing talent, and acquiring innovative technology products and startups as top drivers for M&A deals.

China, the US, Japan, the UK and South Korea were the top five investment destinations for Chinese executives.

And China remained the second most popular investment destination for global companies, only after the US, the report said.