But such data doesn’t account for transactions made through overseas units linked to Chinese companies.
“Because China uses subsidiaries for purchases which do not consolidate in the parent company, the actual amount of purchases looks lower when using more common statistics,” Herrero told CNBC.
These “hidden” deals, however, are tracked in AEI’s data as the think tank utilizes a different methodology and refers to news of deals through subsidiaries registered beyond China’s borders.
Herrero highlighted the purchase of aircraft-leasing company CIT via Avolon Holdings, an Irish firm owned by a unit controlled by Chinese conglomerate HNA — previously among one of the Chinese companies that have made the most acquisitions — as an example.
The $10.4 billion deal appeared in AEI’s investment tracker, but did not show up in Mergermarket data, she said. Mergermarket only classifies deals as outbound Chinese M&A if the headquarters of the bidder are in China.
As measures implemented by Beijing were aimed at curbing the flow of the yuan offshore, the use of overseas vehicles with foreign currency reserves were not subjected to the same restrictions as they did not increase the pressure on outflows when involved in deal-making, said Xuong Liu, managing director of Alvarez & Marsal, an advisory firm that deals with restructuring companies.
Natixis also highlighted an uptick in offshore bond issuance from 2016 to 2017 as indirect proof of how official M&A data likely did not reflect the full picture when it came to tracking total overseas investments.
Natixis said overseas Chinese merger activities are expected to increase this year as domestic growth continues to slow and returns on assets remain “meagre.”
Still, the proposition of Chinese outbound investments in the U.S. will likely slide given increased scrutiny stateside, it added, with Europe expected to be a beneficiary.