Chinese overseas deals worth almost $75bn were cancelled last year as a regulatory clampdown and restrictions on foreign exchange caused 30 acquisitions with European and U.S. groups to fall through.
The figures, which reveal a sevenfold rise in the value of cancelled deals from about $10 billion in 2015, highlight a waning appetite for global dealmaking by the world's second-largest economy. But despite more deals being abandoned, the analysis by law firm Baker McKenzie and researcher Rhodium shows that Chinese direct investment into the U.S. and Europe still more than doubled to a record $94.2 billion in 2016.
Sellers of assets in Europe and the U.S. are becoming increasingly wary of large deals with Chinese buyers, according to people involved with several cross-border transactions involving China.
"The Chinese are getting more professional but sellers are giving more priority to potential buyers outside China because of the restrictions imposed on capital," said one person who dealt with mainland buyers.
China notched up a record capital exodus last year, driven by expectations that the renminbi would continue to weaken against the dollar, and as slowing domestic growth diverted investment elsewhere.
Regulators were unnerved as Beijing burnt through dollars to stem currency depreciation, with reserves falling $320 billion last year. In an attempt to save reserves, the foreign exchange watchdog became one of the biggest hurdles for Chinese groups seeking to buy businesses overseas late last year.