CHINA Trends and Developments Contributed by: Bing Zhai, Commerce & Finance Law Offices
manufacturing, actively pursued acquisitions to acquire new technologies, enter emerging mar - kets and secure critical resources. Beyond the automotive sector, traditional manu - facturing companies across various sub-sectors utilised M&A as a strategic lever for transforma - tion and upgrading. By acquiring innovative technologies and expanding into new markets, these companies aimed to enhance their com - petitiveness in an increasingly globalised and technology-driven landscape. Many manufacturing companies also proactively leveraged capital market tools, such as equity financing and strategic partnerships, to achieve their long-term strategic objectives. The pharmaceutical sector: frequent M&A for innovation The pharmaceutical sector emerged as one of the most dynamic and policy-benefitting indus - tries in 2024, with M&A activity playing a piv - otal role in driving innovation and growth. Large pharmaceutical companies increasingly viewed “external innovation” achieved through M&A and licensing – as equally important to their internal R&D efforts. This trend was particularly evident as companies sought to expand their product pipelines, enter new therapeutic areas and enhance their R&D capabilities. The sector’s M&A activity was further fuelled by broader demographic and societal trends, such as an aging population and rising health awareness. These factors created significant opportunities for acquisitions in innovative drugs, medical devices and digital health solu - tions. For example, companies targeted smaller biotech firms with promising drug candidates or specialised technologies, enabling them to
diversify their portfolios and stay competitive in a rapidly evolving market. Overview of Policies Promoting the Development of China’s M&A Market in 2024 In 2024, the Chinese government introduced a series of policies and regulations aimed at revitalising and standardising the M&A market. These policies, issued by key regulatory bodies such as the State Council and the CSRC, have played a pivotal role in guiding market activity and fostering high-quality development. The New Nine National Guidelines: strengthening regulation and promoting high- quality development In April 2024, the State Council issued Several Opinions of the State Council on Strengthen - ing Regulation, Preventing Risks and Promoting High-quality Development of the Capital Market (the “New Nine National Guidelines” ). This policy aims to enhance the stability and resilience of the capital market by strengthening supervi - sion, preventing risks and improving institutional frameworks. It emphasises leveraging the capital market as the main channel for M&A activities, broadening financing channels and diversifying payment methods, while also encouraging listed companies to focus on their core businesses and improve development quality through M&A and equity incentives. The guidelines also seek to raise listing standards, strengthen information disclosure and corporate governance and pro - mote long-term investment, creating a healthier environment for M&A activities. By deepening delisting reforms and encouraging resource real - location, the policy supports high-quality M&A that aligns with strategic goals and industrial upgrading, fostering a more transparent, fair and sustainable capital market.
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