Aiyengar, a JPMorgan analyst, sees global companies turning to China in the face of volatility

Anu 'Aiyengar, JPMorgan Global Chair of Investment Banking, said that global companies are more eager to partner with innovative Chinese companies as rising economic and geopolitical risk fuels a dealmaking explosion.

Dealmakers will have another record-breaking year in 2026, as CEOs are relying on acquisitions and scale to help them weather the global volatility. Aiyengar stated that American and European companies increasingly see tie-ups between established Chinese players as being less risky in turbulent times than going it alone.

Aiyengar said that "collaborations, partnerships and acquisitions are all on the table."

Biotech is a field that has a lot of innovation. The same is true in the technology area. This is a new way of framing China, which I believe is a healthy direction," added Ms. Shen.

PHARMACEUTICALS DRIVE THE SHIFT

This shift can be seen in the pharmaceutical industry, where drug companies are racing to license Chinese-developed experimental drugs to reduce costs before patents expire. Analysts expect that licensing deals will reach a new record in this year.

According to LSEG, Asia Pacific (ex Japan) saw a rebound in M&A in 2026, with activity up by 57% compared to a year earlier, marking the strongest start since LSEG began tracking data in 2022.

Hong Kong's booming capital markets also contribute to the deals pipeline in the region. More than 500 companies, mainly from China, are waiting to list on the city bourse.

Paul Uren is JPMorgan's Asia Pacific Head of Investment Banking. He said, "The firm achieved record first-quarter global investment banking results, with revenues up 38 percent, and our Asia Pacific results are similar year to date."

The bank has invested in senior talent throughout the region to handle the deal flows.

Uren said that the bank is adding more staff in Japan, Australia and Hong Kong as well as China.

Dealmaking Restructured by Politics

China and the U.S. agreed to create a Board of Investment during Trump's Beijing visit. The Board will be tasked with boosting cross border flows in non sensitive sectors.

Deals are getting bigger. LSEG recorded 68 transactions totaling $10 billion or higher last year, which is double the amount of 2024.

The market continues to reward scale. You're right, there is a premium for scale. Same industry. Aiyengar said that the larger company traded at a higher multiplier than "the smaller company".

Chinese outbound activity has also increased. According to Rhodium, overseas purchases by Chinese companies reached $9.6 Billion in the first quarter 2026. This is the highest amount since early 2021, and the fifth consecutive quarterly increase. The mining and energy sectors led the way. Zijin Gold, for example, took over Allied Gold in Canada for $4 billion.

Trump's second tenure has brought more uncertainty with its abrupt policy changes and volatile relations between China and Russia.

Aiyengar, JPMorgan's Aiyengar, said that JPMorgan encourages its clients to "build flexibility and more levers you can pull" instead of "making long-term decisions on the basis of short-term information."

Geopolitics is still redrawing the deal maps. Cross-border M&A flows are increasingly aligned along political corridors. In April, China's national security concerns led it to block Meta's acquisition of AI start-up Manus for $2 billion.

(source: Reuters)