China’s merger and acquisition (M&A) activity is set to rise significantly in 2025 as companies prepare for potential tariffs under a possible second Trump administration. Analysts predict that Chinese firms will accelerate consolidation and strategic partnerships to strengthen their market positions and mitigate the impact of increased trade barriers.

The anticipated tariffs, which could target key industries such as technology, manufacturing, and green energy, have prompted Chinese companies to explore M&A opportunities both domestically and internationally. “Companies are looking to build resilience and diversify their supply chains to navigate the uncertain trade environment,” said Li Wei, a senior analyst at Beijing-based consultancy Sinolink.

In 2024, China’s M&A deal value reached $500 billion, and experts forecast a 20% increase in 2025. Key sectors driving this activity include semiconductors, electric vehicles (EVs), and renewable energy. The Chinese government is also expected to support these efforts through policy incentives and regulatory easing.