Mainland China’s moves to restrict capital outflow and reduce corporate debt have dented mergers and acquisitions in the Hong Kong market, particularly in insurance.

Hong Kong financial firms have always been attractive acquisition targets, especially for mainland Chinese firms, due to the city’s proximity, wealth, and strong currency. These firms usually use Hong Kong as a springboard for their international ambitions.

However, due to Beijing’s crackdown, mainland Chinese buyers have been driven away, a Reuters report said. Two insurers have already cancelled their planned Hong Kong acquisitions worth a combined US$1.4 billion. Sources have also said that Chinese buyers are struggling to move capital out of their home market.

From a total value of US$5.1 billion in 2017, mergers and acquisitions targeted at Hong Kong financial firms have slumped to US$1.15 billion so far in 2018. This could prove to be the lowest level in 13 years, data from Dealogic shows.

Furthermore, mainland Chinese buyers contributed less than one-fourth of the 2018 amount. Over the past six years, they have made up almost 60% of total M&A volume, or US$21 billion out of US$35.3 billion.

Beijing’s capital controls have been in place since late 2015 to counter the depreciation of the yuan, and have also left sellers with fewer options.

“If you are looking for a buyside mandate, it would probably make a lot of sense to back a non-Chinese name for Hong Kong financial assets,” a senior investment banker at a global investment bank told Reuters.

In October, Hong Kong Life Insurance, owned by five Hong Kong firms, cancelled its US$907 million sale to a mainland Chinese consortium due to the buyer failing to meet closing conditions after over a year.

MetLife also shelved the over US$500 million sale of its Hong Kong unit, after the Chinese would-be buyer was unable to raise the required amount.