CHINA Trends and Developments Contributed by: Bing Zhai, Commerce & Finance Law Offices
and improving examination and approval effi - ciency. The State-owned Assets Supervision and Administration Commission of the State Council has identified 2025 as the key year for strategic restructuring in fields such as new energy and high-end equipment, and this top- level design provides a system guarantee for improving industrial concentration. Under the guidance of central policies, local governments have intensified the introduction of a series of supporting measures since 2024, with provincial administrative regions such as Beijing, Shanghai and Anhui successively roll - ing out regional support plans. For example, the Action Plan for Supporting Mergers and Acquisi - tions of Listed Companies (2025–27), released by Shanghai on 9 December 2024, is of bench - mark significance; it sets clear, quantitative targets such as cultivating ten companies with international competitiveness and achieving an M&A transaction scale of CNY300 billion. In terms of policy implementation, institutional innovations such as the establishment of spe - cial industrial M&A funds and the construction of “one-stop” service platforms have effectively reduced the capital and time costs of corporate M&A. The capital exit mechanism: innovation in exit strategies Structural adjustment of the capital exit mecha - nism has become a key driver of innovation in exit modes. In 2024, the overall A-share IPO market was somewhat cold, with only 100 enter - prises successfully listed throughout the year. This situation has put private equity investment funds that have long relied on IPO exits under severe channel reconstruction pressure. Industry data shows that, with regard to the exit chan -
nels of Chinese private equity institutions, the proportion of IPOs is as high as 80% or more; this is in sharp contrast to the US market, which is characterised by a 70% M&A exit rate. Against this background, the Guiding Opin - ions of the General Office of the State Council on Promoting the High-quality Development of Government Investment Funds clearly oriented policy towards broadening M&A exit channels, and localities such as Anhui and Shanghai have quickly responded and introduced special poli - cies to encourage the establishment of M&A and restructuring sub-funds. Innovative practices in the market are also wor - thy of attention. Through the model of “fund par- ticipation + M&A exit” , an investment institution can realise controlling acquisition and success - ful exit through strategic layout and capital oper - ation, which not only confirms the comparative advantage of M&A exits in terms of procedural efficiency – shortening the operation cycle by 18–24 months compared with the IPO path – but also demonstrates the unique value of this mod - el in terms of the flexibility of valuation schemes, providing a replicable solution for the industry. Cross-border M&A: global expansion and strategic transformation Innovation in the form of cross-border M&A reflects the deep evolution of the globalisation strategy of Chinese enterprises. In the Southeast Asian market, the Regional Comprehensive Eco - nomic Partnership (RCEP) has brought benefits, reducing investment barriers among member countries, and a series of landmark transactions have been successfully completed. Two-way capital flow with the Middle East mar - ket is also accelerating. While sovereign wealth funds such as the Saudi Public Investment
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