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Chinese companies have launched a record wave of foreign acquisitions in the first few weeks of 2016 as they seek inroads into overseas markets amid China's slowing economy and falling currency.

China National Chemical Corp., known as ChemChina, on Wednesday said it would pay $43 billion to buy Swiss pesticide maker Syngenta AG in a deal that, if approved by Syngenta shareholders and regulators, would be the largest foreign takeover by a Chinese company.

Including the ChemChina deal, the combined value of China's outbound mergers and acquisitions has reached about $68 billion so far this year, the strongest volume ever for this period and already more than half of 2015's record annual tally, according to deal tracker Dealogic.

Other Chinese companies, such as Haier Group and China Cinda Asset Management Co., have also been ramping up their foreign-asset purchases in recent years as China looks to bolster its capabilities in industries including agribusiness, real estate and energy.

The flurry of deals is providing a jolt of attention to the world's second-largest economy after the U.S. as it suffers from its weakest growth in 25 years and its volatile stock market panics investors globally.

Companies such as ChemChina that are run by China's government—or state-owned enterprises—are among those buying. A push by President Xi Jinping to boost overseas trade through the "One Belt, One Road" initiative aims to open up new markets from Central Asia to Europe for Chinese companies that previously focused at home.

The policy, invoking the spirit of the old Silk Road trading route between East and West, means government cash may be available to help finance state-owned enterprises, or SOEs, wanting to buy foreign assets.

But Chinese companies' purchase of foreign assets may come under scrutiny at home, as the deals come at a tricky time for the economy.

Beijing is stepping up efforts to halt a flood of money leaving the country in response to the slowdown and a currency that has fallen 5.5% against the U.S. dollar since August. China's latest efforts involve curbing the ability of foreign companies in China to repatriate earnings and banning yuan-based funds for overseas investments, people with direct knowledge of the matter have said.

The Chinese government's concern over capital outflows—which may have been as high as $1 trillion last year, by some estimates—may mean that regulators in Beijing look more closely at certain acquisitions of foreign assets, analysts said. But the government will still likely support foreign deals that are seen as a cornerstone of Chinese companies' overseas expansion, they said.

"It's the nature of the assets that determines Beijing's support," said Derek Scissors, resident scholar at the American Enterprise Institute, a Washington-based think tank.

Chinese acquisitions of key Western technologies are likely to face stiff scrutiny overseas.

In the U.S., a federal agency that screens corporate takeovers for security concerns recently nixed a deal by a Chinese investment fund to buy the lighting business of Royal Philips NV. The business had manufacturing, research and development facilities in the U.S.

The agency, the Committee on Foreign Investment in the U.S., is likely to look closely at the ChemChina-Syngenta deal because most of Syngenta's seed business is in the U.S.

Overall, "we see the deals getting bigger and bigger," said Patrick Yip, mergers and acquisitions leader for Deloitte China, referring to Chinese companies' acquisitions of foreign companies. "I am working on a number of them. Chinese companies want brand power and high technology."

David Brown, transaction services leader for PricewaterhouseCoopers China and Hong Kong, predicts around 50% growth for outbound Chinese mergers and acquisitions every year, for the next several years.

There is "huge pent-up demand," said Mr. Brown, as Chinese companies gain confidence to pursue global deals.

The depreciation of the yuan—and the expectation that it will continue falling—means that Chinese companies are looking to buy now before the price of foreign assets gets more expensive, said Rocky Lee, a Beijing- and Hong Kong-based partner at law firm Cadwalader.

China's yuan, after strengthening by more than 30% over the past decade, has fallen 8% against the U.S. dollar since the beginning of 2014 as policy makers seek to make their currency more market-driven and grapple with a deepening economic slowdown.

Some analysts believe the yuan could fall up to 10% more by the end of this year amid fears that the Chinese economy is slowing faster than expected and as the government's moves to contain market forces send capital flooding out of China.

Chinese state-owned enterprises, for one, are receiving strong backing for strategic foreign acquisitions from the central government.

"A lot of the [state-owned enterprises] are fairly cash-rich," says Ben Cavender, a Shanghai-based principal at China Market Research Group. "One of the issues they're running into is they're out of room to grow in their home market."

ChemChina, when it agreed to buy Italian premium tire maker Pirelli & C. SpA for roughly $7.7 billion last year, had secured funding from an overseas investment vehicle championed by China's president.

Under the deal, Silk Road Fund Co.—an investment vehicle controlled by China's State Administration of Foreign Exchange and other state-owned entities—took a 25% stake in the ChemChina subsidiary set up to acquire Pirelli's shares.

The government is likely to continue providing financial support for SOEs to buy foreign assets in areas such as technology, energy and infrastructure, said Mr. Lee of Cadwalader.

Brian Spegele and Anjani Trivedi contributed to this article.

Write to Kathy Chu at kathy.chu@wsj.com and Julie Steinberg at julie.steinberg@wsj.com

(END) Dow Jones Newswires

February 03, 2016 14:15 ET (19:15 GMT)

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