Chinas M&A Activities Rising in B&R Countries

Chinese companies merger and acquisition （M&A） activities in the Belt and Road countries have increased rapidly over the past few years. China has become one of the major sources of outbound investment for those regions， according to a report jointly released by Thomson Reuters， the Chinese Academy of Social Sciences， and a research institution under Tsinghua University at the end of May.

Chinas M&A transaction volume in the region grew from US $2.264 billion in 2014 to US $9.755 billion in 2016， making China the top acquirer in 2016 ahead of the U.S. and Japan， according to the report.

Globally speaking， the finance， energy， and telecom services are the top three sectors attracting M&A activities in the countries along the Belt and Road routes.

Chinas M&A investment in these countries mostly goes to the energy， power， and raw materials sectors. Kazakhstan， Russia， Israel， Singapore， and Egypt are favorite destinations in terms of transaction volume， accounting for 78.07 percent of the total.

The report showed that Chinas M&A transaction volume in the Silk Road Economic Belt outweighs that in the 21st-Century Maritime Silk Road， while the latter has more M&A cases.

Thriving Cruise Market

China will build its first luxury cruise liner， which is expected to begin operations as early as 2021， said Wu Qiang， general manager of China State Shipbuilding Corporation （CSSC）， at a symposium on the Belt and Road Initiative and the development of cruise economy held at the end of May in Shanghai.

According to Wu， the ship will be 323.6 meters long and 37.2 meters wide， equipped with 3，921 beds that could accommodate as many as 4，980 passengers.

CSSC will work with American cruise company Carnival Corporation & plc， Italian ship building company Fincantieri， and British Lloyds Register to build the ship.

“The move reflects Chinas strong ship-building industry and the vigorous demand for luxury cruises in the Chinese and the whole Asia-Pacific market，” said Wu.

Over the past few years， Chinas cruise market has developed fast with the number of outbound cruise passengers topping 2 million in 2016. The figure is likely to climb to 2.6 million this year， according to China Cruise and Yacht Industry Association.

The association forecast that Chinese travelers will make 10 million cruise trips annually around 2025， which would require about 100 large cruises to meet the demand.

According to data from China Communications and Transportation Association， China is the eighth source country of tourists and the most vibrant cruise market in the world.

Tourism Investment Steadily Increases

Chinas tourism investment is expected to maintain stable and rapid growth in 2017. The China National Tourism Administration（CNTA） predicted that direct investment will stand at RMB 1.5 trillion （US $220 billion） this year， up 20 percent over last year.

The investment hot spots include countryside tourism， low-altitude airspace tourism， tourism big data， tourism themed on culture， sports， and research， holistic tourism， and tourism equipment manufacturing.

“ The tourism industry is in a golden period till 2040，” Li Jinzao， head of the CNTA， said during the China Tourism Investment and Financing Promotion Conference held in May.

Li pointed out that with Chinas GDP per capita surpassing US $8，000， the sector is braced for explosive growth driven by steady economic development， rising incomes， and consumption upgrades. There will be sustainable increases in tourism consumption and travel demands， as well as the number of tourists.

In 2016， domestic tourism revenue totaled RMB 4.69 trillion， contributing around 11 percent to the national economy. Tourism investment rose 29 percent yearon-year in 2016， outpacing an 18-percent increase in the tertiary sector and a 21-percent rise in fixed assets.

The CNTA expected more than 14 billion person-times of travel will be made in 2040， which equates to every Chinese person travelling at least nine times a year. “Travel will be a part of the peoples everyday lives，” said the CNTA.

Satellite Navigation Business Booms

By 2020， the scale of Chinas satellite navigation business will surpass RMB 400 billion （US$58.8 billion）， said Ran Chengqi， director of the China Satellite Navigation Office at the Eighth China Satellite Navigation Conference held at the end of May.

Ran said that the Beidou System will occupy a share of RMB 240 billion to RMB 320 billion in the market by 2020.

According to Ran， over 30 million chip modules of the system were sold in April， while its high-precision board cards and antennas were exported to more than 70 countries and regions， over 30 of which are along the Belt and Road.

The Beidou System has made peoples lives easier through aided driving， accurate farming， and intelligent real estate management， said Ran.

Also at the conference， Wang Li， chairman of China Satellite Navigation System Committee， announced that China would launch 18 Beidou navigation satellites in or around 2018. The system will first provide services for the Belt and Road countries. By 2020， the Beidou satellites will form a complete global satellite navigation system， Wang added.