EY releases the Overview of China outbound investment of H1 2025

• China’s outward direct investment (ODI)¹: In the first half of 2025 (H1 2025), China’s overall ODI reached US$80 billion, down 6.2% year-on-year (YoY). Non-financial ODI amounted to US$72.2 billion, down 0.5% YoY. Non-financial ODI in Belt and Road (B&R) partner countries reached US$18.9 billion, up 20.7% YoY, accounting for 26% of the total, up 5% from the same period last year.
• China overseas mergers and acquisitions (M&As)²: In H1 2025, Chinese enterprises announced a total of US$19.6 billion in overseas M&A, up 79% YoY. The volume of deals decreased by 7% to 200. However, the volume of large deals worth over US$500 million increased from 6 to 14 compared to the same period last year.
  • In terms of sector, in H1 2025, several industries achieved triple-digit YoY growth in M&A value, with TMT (Technology, Media, and Telecommunications sectors) remaining the hottest industry.
  • In terms of region, Asia remains the dominant region, accounting for over half of the total M&A value; Latin America saw a significant increase in M&A activity, with a six-fold increase in M&A value.
• China overseas engineering, procurement and construction (EPC)³: In H1 2025, the value of newly-signed China overseas engineering, procurement and construction (EPC) projects rose by 12.4% YoY to US$129.9 billion, with the completed turnover reaching US$78.1 billion, up 8.1% YoY. In B&R partner countries, the newly-signed EPC contracts and completed turnover both accounted for over 80% of the total.

Today, EY Greater China (hereinafter referred to as EY) released the Overview of China outbound investment of H1 2025. According to the report, in H1 2025, China’s overall outward direct investment (ODI) reached US$80 billion, down 6.2% YoY. Non-financial ODI amounted to US$72.2 billion, down 0.5% YoY. Within this, non-financial ODI in Belt and Road (B&R) partner countries reached US$18.9 billion, up 20.7% YoY. Chinese enterprises announced a total of US$19.6 billion in overseas M&As in H1 2025, up 79% YoY, albeit with the number of deals declining by 7% to 200. Notably, the number of large deals worth over US$500 million increased from 6 to 14 compared to the same period last year.

Loletta Chow, Global Leader of EY China Overseas Investment Network (COIN) stated that in H1 2025, amid mounting external challenges, China’s economy demonstrated strong resilience, achieving a 5.3% YoY in GDP growth⁴. Although ODI showed a slight adjustment, the total value of foreign trade increased by 2.9% to a record high for the same period, with exports to ASEAN and the “new three items” performing particularly well⁵. To counter the fluctuations in the global economic and trade order, China has adopted the two main strategies of “strengthening domestic demand” and “high-level opening up” to mitigate external risks and provide a stable policy expectation for the global market. The stable macroeconomic policies have provided strong support for the globalization of Chinese enterprises. After being tempered by the external environment, Chinese enterprises are poised to focus more on building resilient supply chains, deepening localized operations, and promoting digital and intelligent transformation from a global perspective, accelerating their transition to a high-quality global operation.

Macro-environment: The global economic growth outlook slightly improved in H1 2025, yet uncertainties remain

In H1 2025, China’s economy grew by 5.3% despite increasing external challenges⁶. Due to factors such as lower-than-expected tariff rates imposed by the US on trade deficit source countries, which contradicted the rates announced in April, and fiscal expansion in some major economies, the International Monetary Fund (IMF) revised its global economic growth forecast upward in July to 3.0% for 2025, a 0.2 percentage point increase from the April forecast. Most major economies in 2025 saw upward revisions in their growth rates, with China’s raised by 0.8 percentage points⁷.

The US tariff policy continues to create uncertainties. While the US government stated that the reciprocal tariff suspension will not be extended after 1 August, it remains open to negotiations. Currently, progress have been observed in discussions between the US and the several nations including the EU, the UK, China, Japan, South Korea, Vietnam, Indonesia, the Philippines, Thailand and Cambodia⁸.

At present, developed economies continue to strengthen trade and technology barriers, while emerging markets such as Southeast Asia and the Middle East enhance their attractiveness through policies such as opening foreign investment access and increasing tax incentives. These shifts are shaping new key strategic region. Faced with the complex and ever-changing international environment, the Chinese government has also injected new momentum into economic and trade cooperation and high-level opening up through comprehensive diplomatic interactions. It has also built a systematic cooperation framework with strategic focus on green economy, regional free trade mechanisms, and supply chain resilience construction to cope with uncertainties and provide strong support for the globalization layout of Chinese enterprises.

ODI shows a slight decline, while investment in B&R partner countries rises against the trend

Data shows that in H1 2025, ODI showed a trend of “stable and upgrade” trend, with quality-driven co-construction displacing extensive expansion models. China’s overall ODI reached US$80 billion, down 6.2% YoY. The main investment industries included manufacturing, TMT*, and the new energy industry chain. Non-financial ODI amounted to US$72.2 billion, down 0.5% YoY. Non-financial ODI in B&R partner countries reached US$18.9 billion, up 20.7% YoY, accounting for 26% of the total, up 5% from the same period last year. Popular investment destinations included Southeast Asia, the Middle East, Central Asia and Latin American countries.

Overseas M&A transactions continue to recover, with deal values in B&R partner countries doubling YoY

In H1 2025, overseas M&A transactions continued to recover. Chinese enterprises announced a total of US$19.6 billion in overseas M&A, up 79% YoY. The number of deals decreased by 7% to 200. However, the number of large deals worth over US$500 million increased significantly from 6 to 14 compared to the same period last year.

At the same time, the transaction value in B&R partner countries doubled YoY. The transaction value announced by Chinese enterprises reached US$10.1 billion, up 97% YoY, accounting for about 52% of the total overseas M&A value. Although the number of M&A deals decreased by 20% to 79, the significant increase in deal value in this region reflects that Chinese enterprises’ focus on quality and efficiency.

This trend change reflects the strategic layout upgrade of Chinese enterprises in the international market. While maintaining a high level of investment activity, their investments have become more precise. It also fully demonstrates the pivotal role of the B&R Initiative in promoting overseas M&A, providing new momentum and direction for the international development of Chinese enterprises.

Sector analysis

Chinese enterprises are not only continuing to strengthen their efforts in traditional advantageous fields, but also actively deploying in emerging technologies and strategic resources to achieve the dual goals of technological upgrading and market expansion. In H1 2025, several industries achieved triple-digit YoY growth in M&A value, with TMT remaining the hottest industry.

• By M&A value: The top three industries were TMT, mining and metals, and advanced manufacturing and mobility, accounting for as high as 72% of the total value. TMT accounted for about 42%, reflecting the industry’s accelerated integration and the clear trend of enterprises acquiring technology through M&A.
• By volume of deals: The top three industries were TMT, advanced manufacturing and mobility, and financial services, accounting for 54% of the total volume of deals.
• In B&R partner countries: Chinese enterprises’ M&A focused on mining and metals, TMT, and advanced manufacturing and mobility, with the combined M&A value accounting for 70% of the total. Among them, mining and metals and advanced manufacturing and mobility achieved triple-digit YoY growth in M&A value.
  

Regional analysis

Asia remains the dominant region, accounting for over half of the total M&A value; Latin America saw a significant increase in M&A activity, with a six-fold increase in M&A value.

Asia remained the top destination for Chinese overseas M&A, with a transaction value of US$10.5 billion, up 162% YoY, ranking second in terms of growth rate. North America saw a rebound in M&A transactions, with a transaction value of US$2.3 billion, up 80% YoY. Latin America achieved the highest growth rate, with a transaction value of US$2.3 billion, up 620% YoY, ranking first in terms of growth rate. Europe, although still the second most popular region for Chinese M&A, recorded a decline in both transaction value (US$4.0 billion) and volume of deals (53).

The characteristics of Chinese overseas M&A in different industries and regions in the first half of 2025 are as follows:

• Asia dominated in several industries, including TMT, mining and metals, consumer products, and financial services, with a transaction value share of over 50% in each.
• The healthcare and life sciences industry remained concentrated in the US, with a transaction value share of over 60%.
• The oil and gas and power and utilities industries were mainly focused on Latin America.
  

Country analysis

The country layout has been deeply restructured, with emerging markets gaining strategic importance.

By transaction value: Singapore was the top destination for Chinese overseas M&A in this period. Brazil, Kazakhstan and Sweden newly entered the top 10 most popular destinations. Due to an increase in large deals, transaction values in Singapore, Japan and France saw significant growth.

By volume of deals: Despite a continued decline in the volume of deals, the US remained the top destination for Chinese overseas M&A.

EPC projects: Newly-signed contract value grew steadily, with faster growth in B&R countries

In H1 2025, the value of newly-signed overseas Engineering, Procurement and Construction (EPC) contracts by Chinese enterprises reached US$129.9 billion, up 12.4% YoY. Among them, in B&R partner countries and regions, the newly-signed contract value was US$113.4 billion, up 19.6% YoY, accounting for 87% of the total. The completed turnover of overseas EPC projects by Chinese enterprises was reached US$78.1 billion, up 8.1% YoY. In B&R partner countries and regions, the completed turnover stood at US$64.8 billion, up 7.5% YoY, accounting for 83% of the total.

1. Source: China Ministry of Commerce, EY Analysis
2. Source: LSEG, Mergermarket, data includes deals that have been announced but not yet completed, downloaded on 7 July 2025; EY Analysis
3. Source: China Ministry of Commerce, EY Analysis
4. Source: National Bureau of Statistics of China
5. Source: General Administration of Customs of China, in RMB terms
6. Source: National Bureau of Statistics of China
7. Source: World Economic Outlook Report, International Monetary Fund (IMF), July 2025
8. Source: Publicly available data compiled, statistics as of 31 July 2025. China and the United States have established a China-US economic and trade consultation mechanism, but have not reached a trade agreement

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About COIN
The China Overseas Investment Network (COIN), founded in 2009, connects EY professionals around the globe, and contributes to assisting the internationalization of Chinese enterprises, offering a wide spectrum of professional services covering all stages of overseas investment, from planning, execution to integration. COIN has expanded its network to over 90 countries and territories around the world. The EY B&R Task Force was also built to better assist Chinese enterprises in developing business in B&R partner countries.

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