Only half of Chinese M&A business profiting: ministry

China's overseas merger and acquisition (M&A) projects have reported mixed results in their performance, with only about half earning a profit, according to a report from the Ministry of Commerce (MOC).

Among all the completed M&A projects, 13 percent are earning big, 39 percent a little, 24 percent can merely keep a balanced sheet, and another 24 percent are reporting losses, the report says.

Cost control on supervision and management, risk control and global layout have become the key points to M&A success.

Chinese companies have been active in the global market in recent years and investing in increasingly diversified sectors. High-end manufacturing businesses like chemistry, semiconductor and transports are of growing interest, Economic Information Daily reported.

Analysis by Thomson Reuters also indicates that China's M&A transaction volume exceeded one trillion dollars in 2015, a six-year high, while global transaction volume went down 23 percent in the same period.

Companies canvassed in the MOC report mainly cite convenient financing channels, decades of experience and better brand images as three key elements for Chinese companies in grabbing a bigger stake in global firms.

However, they also admit the necessity of enhancing their management experience to cope with risks such as financial hazards caused by improper bidding prices, and the consequences of poor knowledge of local policies and environments.

M&A are a way for China to chart its own global industrial strategy, said Professor Zhang Luyang from Fudan University.

Zhang added that companies should operate their M&A projects from this viewpoint, rather than merely aiming at bringing advanced technologies back to China.

(Ecns.cn)