EY releases the Overview of China outbound investment of 2024

• China’s total outward direct investment (ODI) rose by 10% year-on-year (YoY) to US$162.8 billion in 2024. Non-financial ODI increased by 11% YoY to US$143.9 billion, among which, non-financial ODI in Belt and Road (B&R) partner countries reached US$33.7 billion, recording 5% YoY growth.
• The total overseas mergers and acquisitions (M&A) value announced by Chinese enterprises declined by 31% YoY to US$30.7 billion, with the deal volume decreasing by 15% to 422.
  • According to industry analysis, the advanced manufacturing and mobility and TMT* sectors remained the most attractive sectors for overseas M&A. The mining and metals sector newly ranked top three in terms of M&A value, with these three sectors collectively accounting for 56% of the total M&A value. In this period, only the financial services sector recorded an increase in M&A value, while growth in deal volume was recorded solely in the mining and metals and advanced manufacturing and mobility sectors.
  • In terms of region, Asia has been the most favored M&A destination for Chinese enterprises for the sixth consecutive year. Despite an overall sluggish M&A market, Chinese investments in Africa, Japan, South Korea, the Nordics, India and Brazil experienced an increase in both value and deal volume. However, M&A activities by Chinese enterprises in the US have reached a 10-year low in both value and deal volume.
• Additionally, the value of newly-signed China overseas engineering, procurement and construction (EPC) projects rose by 1% YoY to US$267.3 billion, marking a new historical record. With the enhancement in green infrastructure development, newly-signed contracts for energy-saving and environmentally friendly projects rose by 13% to US$49.3 billion.

*Note: TMT refers to Technology, Media and Telecommunications sectors.

Today, EY Greater China (hereinafter referred to as EY) released the Overview of China outbound investment of 2024. According to the report, China's overall ODI grew by 10% YoY to US$162.8 billion in 2024. Non-financial ODI increased by 11% YoY¹. Although the total value of overseas M&A announced by Chinese enterprises decreased by 31% YoY to US$30.7 billion, both value and deal volume in countries and regions such as Africa, Japan, South Korea, the Nordics, India and Brazil rose against the trend².

Loletta Chow, Global Leader of EY China Overseas Investment Network (COIN) stated, despite the increasing complex and challenging in the external environment in 2024, the Chinese economy remains stable, achieving a projected annual growth target of 5.0%³. Despite facing multiple obstacles, China’s foreign trade has reached a historic high, with a YoY growth of 5%⁴. China upholds fundamental principles and break new ground in its diplomatic policy, creating a favorable environment for high-level foreign openness. In the realm of innovation, China maintains its leading position with 27 technology clusters among the top 100 globally⁵. As 2025 marks the final year of the 14th Five-Year Plan, key directives from the Central Economic Work Conference emphasize the importance of promoting high-quality cooperation under the Belt and Road Initiative (BRI) and enhancing the overseas comprehensive service system. Innovations in financial services, strengthening foreign-related rule of law, bolstering e-commerce logistics support, and so on will be crucial initiatives. For outbound enterprises, 2025 will be a year of significant challenges, with protectionism and the trend towards anti-globalization continuing to accelerate. Chinese companies are essential to prioritize technological innovation, enhance strategic flexibility, align with national development strategies and develop comprehensive win-win strategies that foster collaboration and mutual benefits with international partners. Looking forward to 2025, we anticipate more Chinese enterprises to navigate overseas effectively and steadily, leveraging their strengths to thrive in the global market.

With increasing geopolitical risks, China’s diplomacy fosters favorable external environment

In 2024, global economy is expected to increase by 3.2%⁶, while China’s economy is expected to grow by 5.0%³, demonstrating steady progress. The exchange rate of USD/RMB has shown significant fluctuations, alternating between appreciation and depreciation, with a slight depreciation of 1.5% over the year. However, RMB has appreciated against other major currencies, such as the won, yen, Australian dollar and euro⁷. China upholds fundamental principles and break new ground in its diplomatic policy, creating a favorable environment for high-level foreign openness. President Xi Jinping has participated in key diplomatic activities, including the Conference Marking the 70th Anniversary of the Five Principles of Peaceful Coexistence, the Beijing Summit of the Forum on China-Africa Cooperation, and the China-Arab Cooperation Forum. He also undertook four significant visits to Europe, Central Asia, BRICS nations and Latin America. During these visits, China signed multiple cooperation agreements with countries such as France, Serbia, Hungary and Brazil, and announced the substantial conclusion of negotiations on the China-ASEAN Free Trade Area 3.0⁸. On the global stage, the policy environment is experiencing a dual divergence. Western countries, particularly in Europe and the US, are increasing barriers in trade, technology, and industrial subsidies, exacerbating geopolitical risks. In contrast, emerging markets continue to open up, with countries in Southeast Asia, the Middle East and Latin America introducing incentives such as eased foreign investment restrictions and enhanced tax benefits to enhance local competitiveness.

Global economy is expected to grow by 3.3% in 2025, with the US (+2.7%) expected to lead developed economies and Spain (+2.3%) continuing to lead among the major European countries. Among emerging markets and developing economies, India (+6.5%), Ethiopia (+6.5%), the United Arab Emirates (+5.1%), China (+4.6%), the ASEAN-5⁹ (+4.6%) and Egypt (+4.1%) are anticipated to maintain robust growth rates⁶.

Sustained ODI growth fuelled by the dual engines of brand and technology from Chinese firms¹

In 2024, China’s overall ODI reached US$162.8 billion, up 10% YoY. Among which, non-financial ODI grew by 11% YoY to US$143.9 billion. The trend of Chinese enterprises expanding abroad remains robust, driven primarily by brand and technology. The popular investment sectors included advanced manufacturing and mobility, the electric vehicle supply chain, energy and resources, and infrastructure. In terms of region, non-financial ODI in B&R partner countries rose by 5% YoY to US$33.7 billion, accounting for 23% of total investments. Notably, investments in the ASEAN region experienced a rapid YoY growth of 13%, with major allocations directed towards Singapore, Indonesia and Thailand.

Looking ahead to 2025, given an increase in external environmental challenges, Chinese enterprises must leverage four key trends for successful international expansion: 1) Enhancing strategic resilience by dynamically adjusting their global layouts and improving supply chain resilience to respond effectively to changing market conditions; 2) Building win-win strategies across various domains, including market access, technology, supply chain management, and talent acquisition; 3) Aligning with national development strategies and deepening engagement in B&R partner countries; 4) Leading with technological innovation by developing new productive capabilities for global markets and ensuring independently controllable key technologies to build global competitiveness.

Overseas M&A reached five-year low amid regional resilience²

Chinese enterprises announced a total of US$30.7 billion in overseas M&A in 2024, down 31% YoY. The announced deal volume declined by 15% YoY to 422. Both the total value and deal volume reached a five-year low. The announced M&A value of Chinese enterprises in the B&R partner countries declined by 33% YoY to US$13 billion. The announced deal volume in these countries dropped by 15% YoY to 184.

• Sector analysis

In terms of M&A value, the most popular industries were advanced manufacturing and mobility, TMT, and mining and metals, which together accounted for 56% of the total M&A value. However, in addition to financial services sector, other industries experienced varying degrees of decline in M&A value, with the health care and life sciences industry experiencing the most significant drop. Regarding deal volume, the top three sectors were TMT, advanced manufacturing and mobility, and consumer products, comprising 52% of the total deal volume. Among which, both advanced manufacturing and mobility as well as mining and metals experienced an increase in deal volume, despite the overall decline in M&A activities.

• Regional analysis

In 2024, Asia remained the largest region for Chinese overseas M&A value for the sixth consecutive year. While most regions have experienced declines in both the M&A value and deal volume, Africa saw a notable increase in both metrics. Chinese enterprises reported growth in M&A value and deal volume in Japan, South Korea, the Nordics, India, and Brazil. However, given a negative impact from geopolitical factors, the M&A value and deal volume in the US reached a 10-year low in 2024. Despite the US still being the top destination for Chinese enterprises’ M&A activities by deal volume, its position in terms of deal value has dropped to No. 9.

Steady growth in overseas EPC projects driven by advancement in green infrastructure¹

In 2024, Chinese enterprises achieved remarkable milestones in overseas EPC projects, with newly-signed contracts rising by 1% YoY to US$267.3 billion, marking a new historical high. Notably, newly-signed contracts in B&R partner countries rose by 0.4% YoY to US$232.5 billion, accounting for 87% of the total. Newly-signed contracts for energy-saving and environmentally friendly projects amounted to US$49.3 billion, up 13% YoY.

The completed turnover of China overseas EPC projects rose by 3% YoY to US$166 billion; among which, the completed turnover for B&R partner countries also grew by 3% YoY to US$138.8 billion, accounting for 84% of the completed turnover.

1. Source: China Ministry of Commerce
2. Source: London Stock Exchange Group (LSEG), Mergermarket, data includes announced but not yet completed deals, downloaded on 6 January 2025; EY analysis
3. Source: National Bureau of Statistics of China
4. Source: General Administration of Customs of China, in RMB
5.  Source: World Intellectual Property Organization (WIPO) Statistical Database, April 2024. Among the top 100 technology clusters, the five economies with the highest number of clusters are: China with 27 (including Mainland China, Hong Kong and Taiwan), the US with 20, Germany with 8, and both India and South Korea with 4 each
6. Source: World Economic Outlook, International Monetary Fund (IMF), January 2025
7. Source: People’s Bank of China, using the RMB exchange rate midpoint on 31 December 2024 to 2 January 2024, EY analysis
8. Source: Chinese Ministry of Foreign Affairs, compiled by EY
9. Note: ASEAN-5 refers to Indonesia, Malaysia, the Philippines, Singapore and Thailand

-Ends-

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