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The number of global merger and acquisition (M&A) deals declined for the first time since 2010 last year amid escalating trade tensions and political instability.

Geopolitical tensions took their toll as Chinese purchases of U.S. firms plummeted by 94.6 percent, falling to a value of $3 billion from a record $55.3 billion in 2016, according to research released by Mergermarket on Thursday.

China instead turned its attention to Europe, the data suggested, as Chinese M&A bids in the region soared by 81.7 percent to $60.4 billion.

Elsewhere, the number of cross-border M&A deals fell by 6.6 percent. After steadily rising for close to a decade, the total number of deals struck globally fell to 19,232 from 19,974.

While the number of deals fell, individual deals rose in value, with the average deal size reaching its second highest value on record at $385 million and total M&A value rising 11.5 percent to $3.53 trillion.

Jonathan Klonowski, Mergermarket’s EMEA research editor, told CNBC’s “Squawk Box Europe” on Wednesday that he expected geopolitical tensions to continue impacting the number of deals finalized in 2019.

“If you look at the protectionist activities of governments, they are going to make these large deals harder to complete,” he said. “The majority of (the spending) increase we saw this year was domestic activity rather than cross-border activity, so that defensive domestic consolidation is possibly what we’ll see more of in the coming year.”

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Death toll from two Sichuan China earthquakes rises to 11

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Destroyed buildings at the ruins of earthquake-hit Beichuan county during the ten year anniversary on May 12, 2018 in Sichuan province, China. The Beichuan county was relocated a decade after it was destroyed by the May 12, 2008 earthquake in which more than 15000 people died.

Wang He | Getty Images

The death toll from two strong earthquakes in China rose to 11 on Tuesday, with 122 people injured, state media said, adding that rescuers pulled some survivors from rubble in a part of the country that often suffers strong tremors.

The quakes, roughly 30 minutes apart, hit the southwestern province of Sichuan late on Monday, with shaking felt in key regional cities, such as the provincial capital of Chengdu and the metropolis of Chongqing.

People rushed into the streets and cracks were left in some buildings by the quakes, pictures posted on the social media accounts of state media showed.

Rescuers pulled some people out of rubble alive near the epicentre, in a largely rural area, state television added.

A quake of magnitude 5.9 was followed by a smaller one of 5.2 magnitude, both at a depth of 10 km (6 miles) and centred near Changning county, the United States Geological Survey said.

There were several aftershocks, the China Earthquake Administration said, while the U.S. quake agency recorded one of magnitude 5.2 on Tuesday.

In May 2008, Sichuan suffered a huge earthquake that killed almost 70,000 people.

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Meatless alternatives are on the rise, so is global meat consumption

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When it comes to the burgers or steaks on your plate, looks and tastes can be deceiving as “meatless meat” and “plant-based meat” gain traction.

Sales of meat alternative grew 30% in 2018 compared to the previous year, according to Nielsen Product Insider.

While the alternative meat market could grow to be worth $140 billion globally in the next ten years, according to Barclays, it’s still a small percentage of the current $1.4 trillion global meat market which is also showing no signs of slowing down.

Still, the demand for alternatives has increased.

Fad or the future of food?

Companies like Impossible Foods and Beyond Meat — which was publicly listed in May and saw its stock go up more than 600% at one point — are making plant-based protein products for the masses, and the outlook appears promising.

Fast food chains, including Carl’s Jr. and White Castle have introduced vegetarian burgers on their menus and Burger King began rolling out meatless Impossible Whoppers at all of its 7,200 locations in the U.S.

In London, salad and sandwich chain Pret a Manger is testing vegetarian-only locations, while co-working company WeWork said it will no longer reimburse its 6,000 employees for meals that contain meat.

Then there are movements such as “Meatless Monday,” which encourages people to adopt vegetarian diets at the start of each week, and “Veganuary” — a movement which saw a record 250,000 people pledge to eat vegan for the month of January.

Yet, some critics argue there is no conclusive evidence that alternatives have better nutritional value than real meat.

“We can’t really market it … as necessarily better for you, because we don’t know,” former U.S. Agriculture Secretary Dan Glickman told CNBC’s “Fast Money” recently.

“Some people eat it. It certainly won’t hurt you. It can be very tasty. But it doesn’t mean it’s better for you,” he said.

Rising meat consumption

Despite the trend in eating plant-based “meat,” global consumption for meat is still on the rise, driven in part by countries like China and Brazil which saw a massive increase in recent decades.

The average person in China, for instance, went from consuming just nine pounds of meat per year in 1961, to 137 pounds per year in 2013, according to The Economist.

“As countries get wealthier, there’s a tendency to eat more meat as a sign of wealth, as a sign of like, ‘I can afford it,'” said Lily Ng, CEO of Foodie, a food magazine and online platform based in Hong Kong.

Globally, the average amount of meat consumption has nearly doubled over the past 50 years.

Although, countries including the U.S. and the U.K. may have reached a so-called “Meat Peak” — which means total meat consumption has hit a peak and declined slightly recently. In addition to that, one in three people in the U.K. says they’ve stopped or cut down on eating meat, according to a survey by Waitrose supermarket.

Pat Brown, CEO and founder of Impossible Foods, a start-up which makes plant-based alternatives aimed to look and taste like meat, expects more customers to reassess their meat consumption. “It’s going to be a tipping point in five to ten years,” he told CNBC.

He wants to see animals removed entirely in the food system by 2035.

“Everybody’s going to realize that the animals in food technology is basically going to disappear very soon,” he said.

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US firms say China tariffs will raise costs, few alternative sources

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Female labors work in a cloth factory which exports to European Union in Huaibei, Anhui province, East China.

Jie Zhao | Corbis News | Getty Images

A wide range of U.S. companies told a hearing in Washington on Monday that they have few alternatives other than China for producing clothing, electronics and other consumer goods as the Trump administration prepares new tariffs on remaining U.S.-China trade.

The comments came on the first of seven days of testimony on President Donald Trump’s plan to hit another $300 billion worth of Chinese imports with duties of 25%.

Sourcing from other countries will raise costs, in many cases more than the 25% tariffs, some witnesses told a panel of officials from the U.S. Trade Representative’s office, the Commerce Department, State Department and other federal agencies.

Trump and top members of his cabinet have said that the tariffs, if imposed, would accelerate a move of manufacturing out of China.

But dozens of witnesses in oral and written testimony said that moving operations to Vietnam and other countries would not be feasible for years due to a lack of skills and infrastructure in those locations. China dominates global

production in industries from shoes to electronics to port gantry cranes.

“That 25% is just going to whack us on the head,” said Rick Helfenbein, president of the American Apparel and Footwear Association. “If we could move more product out of China we would, but we haven’t been able to.”

Mark Flannery, president of Regalo International, a Minnesota-based maker of baby gates, child booster seats and portable play yards, said that pricing quotes for shifting production to Vietnam – using largely Chinese-made steel – were 50% higher than current China costs, while quotes from Mexico were above that.

“Currently there’s no country manufacturing metal baby gates outside of China,” Flannery said.

Child safety products such as car seats were spared from Trump’s previous tariffs on $200 billion worth of Chinese goods, imposed in September 2018. But in the drive to pressure China in trade negotiations, USTR put them back on the list, along with other products spared previously, from flat-panel televisions to Bluetooth headphones.

The proposed list, which will be ready for a decision by Trump as early as July 2, includes nearly all consumer products, and could hit Christmas sales hard, particularly cell phones, computers, toys and electronic gadgets.

Marc Schneider, chief executive of fashion footwear and apparel marketer Kenneth Cole Productions, said 25% tariffs would wipe out the company’s profits and cost jobs.

“We’re going to lower the quality of footwear, raise prices and accomplish nothing by moving it around to other countries,” Schneider said.

Jean Kolloff, owner of cashmere importer Quinn Apparel, said her reason for opposing the tariffs was more geographical — the Alashan goat that produces light-colored cashmere wool is only found in China’s Inner Mongolia region.

Deteriorating relations

The tariff hearings are underway amid a severe deterioration of U.S.-China relations since Trump accused Beijing in early May of reneging on commitments that had brought the world’s top two economies close to a deal to end their nearly year-long trade war.

Since then, Trump raised tariffs to 25% on $200 billion of Chinese goods.

The $300 billion list of products being reviewed in the hearing would bring punitive tariffs to nearly all remaining Chinese exports to the United States.

There are no meetings scheduled to resume negotiations over U.S. demands that China enforce intellectual property protections and curb forced technology transfers and industrial subsidies.

Trump has said he wants to meet with Chinese President Xi Jinping during the June 28-29 G20 leaders summit in Japan, but neither government has confirmed a meeting.

Companies including retailer Best Buy, vacuum cleaner maker iRobot and TV streaming device maker Roku all argued against the tariffs on consumer tech goods, saying they would reduce demand for electronics and ultimately threaten U.S. technology leadership.

US factories, Chinese parts

Not all of the witnesses on the first day of the hearing were opposed to the tariffs. Mike Branson, president of Rheem Manufacturing Co’s air conditioning division, asked Trump administration officials to close a loophole that was allowing Chinese firms to skirt air conditioner tariffs by shipping condenser and air handler units separately.

This allowed the units to be imported duty free as parts, rather than as completed systems that were subject to tariffs. Domestic manufacturers had ample capacity to make these products, Branson said.

Other companies with U.S. manufacturing operations voiced opposition to the tariffs because they depend on Chinese components, such as light-emitting diode parts for lighting manufacturer Ledvance and stitched leather parts for athletic shoe maker New Balance.

New Balance vice president Monica Gorman said the tariffs “will risk our company’s overall financial health, which will in turn limit our ability to maintain and re-invest in our American factories.”

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