Mergers and acquisitions (M&As) plunged by a third in China in the first six months from last year as the economy slowed down, but such deals are expected to pick up in the second half. A study by accounting firm PricewaterhouseCoopers (PwC) showed a 42% plunge in M&A deals by foreign investors in the period, as they pulled back amid uncertainties over the economy. Domestic deals shrank 25%, while private-equity deals worth more than USD10 million fell a steep 39%. Outbound mergers and acquisitions from China, however, maintained their momentum. Deal numbers were flat year on year but values nearly tripled compared with the first half last year and are on track to set a record this year. PwC Greater China private equity group leader David Brown said deals in the resources and energy sectors continued to dominate overseas acquisitions of Chinese companies, making up about 44% of total outbound transactions. Last month, China National Overseas Oil Corporation (CNOOC) said it was prepared to pay USD15 billion for Canada’s Nexen, as part of a strategic move to enhance energy security by diversifying away from politically unstable regions such as the Middle East. If successful, it will mark China’s largest overseas acquisition. Chinese outbound deals accounted for 69% of the total deal value in the first half, and seven out of the nine deals were worth over USD1 billion each. PwC said M&As would likely increase in the second half as more funds prepared to invest and more deals moved through the pipeline. Still, there could be fewer deals this year than last year. Private equity funds continue to be interested in investing in sectors that are in line with 12th Five Year Plan priorities such as the consumer, health care and technology sectors.