China's Capital Market Enters a New Wave of Mergers and Acquisitions

SHENZHEN, China, Dec. 22, 2025 /PRNewswire/ -- Guosen Securities Co., Ltd., one of China's leading comprehensive investment banks and securities firms, observes that the country's capital market is entering a new stage of reform and strategic transformation. According to the company's latest analysis, Mergers and Acquisitions (M&A) activity in the A‑share market is accelerating as a key driver of industrial upgrading and innovation. In the first three quarters of 2025, the market recorded 3,470 mergers and acquisitions, a 7.93 percent increase year on year, and 134 major asset restructurings, an 83.56 percent surge from the same period in 2024. Guosen Securities notes that mergers and acquisitions have become an essential mechanism for supporting the real economy, with an increasingly strategic focus on cultivating new productive forces, driving technological advancement, upgrading industries, and enhancing enterprise competitiveness.

Policy Support Opens a New Window for M&A

Guosen Securities emphasized that the development of the M&A market has received strong backing at the national policy level. With regulators and local governments working in tandem, a new policy window for M&A has officially opened. Over the past two years, the China Securities Regulatory Commission (CSRC) has rolled out a series of landmark documents, including the Sixteen Measures to Support the High-Level Development of Technology Enterprises through Capital Markets, the Eight Measures to Deepen Reform of the STAR Market and Promote Technological Innovation and New Productive Forces, and the Opinions on Deepening Reform of the M&A Market for Listed Companies.

These initiatives aim to enhance inclusiveness, adaptability, precision, and efficiency in the capital market's M&A framework. As Guosen Securities noted, reforming the M&A system has become a central pillar of China's broader market-oriented reforms, ensuring that listed companies can more effectively leverage capital markets to pursue strategic restructuring.

Rising Activity in the Domestic M&A Market

The numbers tell a compelling story. In the first three quarters of 2025, the A-share market recorded 3,470 M&A transactions, representing a year-on-year increase of 7.93 percent. More strikingly, there were 134 major asset restructuring cases, up 83.56 percent compared with the same period last year.

This surge underscores how M&A has evolved into a routine feature of corporate economic activity in China. It is now widely recognized as a crucial pathway for cultivating industry leaders and enabling enterprises to scale up. As China's capital market shifts from a traditional "financing function" toward a more sophisticated "resource allocation function," M&A has emerged as a powerful tool. Companies are increasingly using external expansion to integrate upstream and downstream segments of their industrial chains, thereby optimizing asset allocation, expanding scale, adjusting production capacity, and achieving strategic transformation.

Focus on New Productive Forces

Guosen Securities highlighted that the latest wave of M&A is closely aligned with China's national strategy of developing new productive forces. In the era of technological revolution and industrial transformation, M&A serves as a core mechanism for strengthening, supplementing, and extending industrial chains. By consolidating resources, enterprises can build more secure and reliable supply chains, enhance integration, and boost overall competitiveness.

Recent M&A targets reveal a clear trend: emerging industries are at the forefront. Transactions in sectors such as semiconductors, artificial intelligence, and high-end equipment manufacturing have been particularly active. These industries, considered strategic and forward-looking, embody the "new" characteristics policymakers are eager to promote.

The phenomenon reflects the combined influence of policy guidance, industrial upgrading needs, and capital market mechanisms working in concert. In the era of a fresh wave of technological revolution and industrial transformation, mergers and acquisitions can knit together the upstream and downstream segments of the supply chain—strengthening weak links, securing critical nodes and extending strategic reach—thereby sharpening vertical integration and building a more resilient, reliable supply-chain architecture that lifts the competitive power of the entire industrial ecosystem.

Cross-Border M&A Gains Momentum

Beyond domestic restructuring, cross-border M&A has become an increasingly important component of China's outward direct investment. Since September 2024, more than 100 listed companies have launched overseas M&A deals, with transaction values exceeding one trillion yuan.

This trend is fueled by both policy incentives and the pressing need for industrial upgrading. Chinese enterprises are accelerating their push into global industrial hubs, seeking to secure high-value assets and advanced technologies. Sectors such as high-end manufacturing, information technology, and healthcare are emerging as prime targets for cross-border acquisitions.

Overall, M&A activity in China's capital market is entering a new phase of strong momentum, characterized by a strategic focus on fostering new productive forces, promoting technological innovation, driving industrial upgrading, and enhancing corporate strength and competitiveness. The firm notes that this ongoing wave of international expansion underscores China's evolving position within the global value chain, reflecting the country's transition toward higher value‑added, innovation‑driven growth.

It also provides new pathways for building a modern economic system and cultivating endogenous growth drivers. In essence, cross-border M&A is not only about acquiring assets abroad but also about positioning Chinese firms at the cutting edge of global competition.

Guosen Securities stresses that, looking ahead, steady improvement of the regulatory ecosystem will, with the support of capital markets, position M&A as a pivotal instrument for strengthening industrial chain resilience and advancing national strategic objectives. This dynamic is expected to lay a solid foundation for China's pursuit of high-quality economic growth.