EY releases the Overview of China outbound investment in the first quarter of 2026

• China’s outward direct investment (ODI)¹: In Q1 2026, China’s overall ODI reached US$44.5 billion, up 8.9% year-on-year (YoY). Non-financial ODI amounted to US$33.5 billion, down 6.1% YoY, continuing the adjustment trend observed in the fourth quarter of 2025.
• China overseas mergers and acquisitions (M&A)²: In Q1 2026, Chinese enterprises announced a total of US$12.5 billion in overseas M&A, up 14% YoY. The number of deals stood at 84, a sharp decline of 28% YoY, hitting a new quarterly low in nearly a decade. The average deal value has increased.
  • By sector, Mining & Metals and Consumer Products emerged as the two most active sectors. Mining & Metals recorded more than a tenfold increase in M&A value during the period and accounted for 49% of the total.
  • By region, the deal value in North America, Europe, Africa and Oceania recorded growth, while the deal number declined across all continents. The top three destinations by M&A value for this period were Canada, Germany and Norway.
• China overseas engineering, procurement and construction (EPC)³: In Q1 2026, the value of newly signed contracts for Chinese overseas EPC projects reached US$55.4 billion, down 5.5% YoY. New contracts in Belt and Road (B&R) partner countries reached US$50.2 billion, up 5.8% YoY, accounting for 90% of the total; Completed turnover reached US$37.3 billion, up 9.2% YoY.

Today, EY Greater China (hereinafter referred to as EY) released the Overview of China outbound investment of Q1 2026. According to the report, China's outbound investment demonstrated resilience amid an increasingly complex and volatile global trade environment in Q1 2026, while rising market uncertainties lead to greater prudence in Chinese enterprise’s going global. During the period, China’s overall ODI reached US$44.5 billion, up 8.9% YoY. Non-financial ODI amounted to US$33.5 billion, down 6.1% YoY, continuing the adjustment trend observed in the fourth quarter of 2025. Chinese enterprises announced a total of US$12.5 billion in overseas M&A, up 14% YoY. However, the number of deals stood at 84, representing a sharp decline of 28% YoY and marking a new quarterly low in nearly a decade.

Loletta Chow, EY China Overseas Investment Network (COIN) Global leader and EY Greater China Belt & Road Task Force Leader, says: “In Q1 2026, despite an increasingly turbulent international landscape, China's economy started the year on a solid footing, with GDP growing 5% YoY⁴. Overall ODI increased by 8.9% YoY⁵, while overseas M&A value rose 14% YoY⁶. Goods exports grew 14.7% YoY⁷, reflecting continued momentum in Chinese enterprises' global expansion. However, amid rising market uncertainties, non-financial ODI, overseas M&A deal number and the value of newly signed overseas EPC contracts all declined.”

“In the face of a complex external environment, China has maintained strategic resolve, continued to pursue high-quality development and high-standard opening up, and remained stabilizing force for global development. In March, China’s annual Two Sessions were successfully convened, and the Chinese government officially issued the China’s 15th Five-Year Plan⁸, setting out a blueprint for future development. From a going-global perspective, the relevant policy deployment is characterized by systematic empowerment, the dual drivers of digitalization and green development, and an equal emphasis on rules-based governance and risk compliance. This marks a shift in overseas strategy from scale-driven expansion to institutional opening up and value-chain-side coordination. A series of supporting policies has since been rolled out, including the establishment of the Bureau of Overseas State-Owned Assets Supervision by State-owned Assets Supervision and Administration Commission (SASAC), underscoring the heightened national focus on optimizing outbound strategies and strengthening risk management for Chinese enterprises. In addition, since the beginning of this year, numerous leaders of state and senior government officials from various countries have paid high-level visits to China, resulting the signing of more than 100 bilateral cooperation agreements, and further deepening mutual trust and collaboration between China and major economies.”

“Looking at the global landscape, conflict in the Middle East is profoundly disrupting the global economic order. The more protracted the conflict, the greater its impact on global energy security and supply-chain stability. Against this backdrop, Chinese enterprises going global need to adopt a more prudent approach. In particular, they should closely monitor economic dynamics and spillover risks in countries highly dependent on energy imports, and conduct advance multi-scenario analyses. Risk management and contingency plans should be developed, and operational and strategic actions should be implemented immediately to enhance corporate resilience.”

Macro environment: Rising external uncertainties and new domestic policies supporting the high-quality global expansion of Chinese enterprises

In Q1 2026, the global geopolitical and economic landscape continued to undergo profound adjustments, with external uncertainties once again on the rise. Taking the impact of regional conflicts into account, the International Monetary Fund (IMF) projects global economic growth of 3.1% in 2026, down 0.2 percentage points from its January 2026 forecast and 0.3 percentage points lower than the growth rate recorded in 2025⁹. Advanced economies are expected to maintain overall growth momentum, with the United States posting slightly higher growth than in 2025, while growth in most other major advanced economies remained flat or declined. Emerging economies continued to lead global growth, although some Middle Eastern countries experienced a marked slowdown. The conflict in the Middle East is disrupting global supplies of energy and bulk commodities, with the most directly affected industries including Oil & Gas, Chemicals, Power & Utilities, Insurance, Aerospace & Defense, Mobility, Technology, Consumer Products and Infrastructure. Currently, the conflict is affecting the global economy primarily through three transmission channels: oil and gas supply disruptions, global supply chain disruptions and heightened volatility in financial markets. In response, enterprises are advised to conduct multi-scenario analyses and identify operational and strategic actions that can be implemented immediately to enhance resilience¹⁰, such as diversifying supplier networks, hedging against price-increase risks and increasing inventory reserves.

In response to external challenges, China is expanding the scope of multi sector cooperation through proactive policy deployments and pragmatic bilateral diplomacy. In Q1 2026, high-level interactions and dialogues between China and major global economies intensified notably, creating a more favourable macro environment for Chinese enterprises to expand in international markets. Meanwhile, China's stable economic fundamentals and its continuously improving opening-up policies have strengthened confidence and provided sustained support for enterprises seeking steady integration into the global value chain. As reflected in the Report on the Work of the Government adopted at this year's Two Sessions and in the China’s 15th Five-Year Plan, the strategic direction of policies supporting Chinese enterprises’ global expansion has become more focused and proactive. The emphasis has shifted from simply “encouraging enterprises to expand overseas” to providing systematic support that is “well-coordinated, risk-mitigating and service-oriented”, together outlining a new blueprint for the high-quality global expansion of Chinese enterprises.

Overall ODI maintains growth, while non-financial investment continued the adjustment trend

In Q1 2026, China's overall ODI reached US$44.5 billion, up 8.9% YoY. Non-financial ODI amounted to US$33.5 billion, down 6.1% YoY. Non-financial ODI in B&R partner countries amounted to US$8.8 billion, down 0.9% YoY, accounting for 26% of the total during the same period.

Overseas M&A value maintains growth, while deal volumes declined sharply

In Q1 2026, the value of overseas M&A activity maintained steady growth, with Chinese enterprises announcing total overseas M&A transactions of US$12.5 billion, up 14% YoY, though the growth rate moderated. Against the backdrop of heightened geopolitical risks, Chinese enterprises' investment decisions are expected to become more increasingly rational and prudent, and cross-border M&A value in 2026 may struggle to sustain the strong growth momentum seen last year. Meanwhile, the number of overseas M&A deals announced in Q1 stood at 84, representing a sharp decline of 28% YoY and marking a new quarterly low in nearly a decade. The average deal value has increased.

Sector analysis

Mining & Metals and Consumer Products emerge as the two most active sectors

By M&A value, Mining & Metals was the largest popular sector during this period, with total deal value reaching US$6.17 billion, representing more than a tenfold YoY increase and accounting for nearly half of the total M&A value. Consumer Products maintained robust M&A momentum during this quarter, with deal activity continuing to focus on brand acquisition and channel integration. At the sub-sectors levels, Chinese enterprises showed notable interest in apparel and food & beverage brands.

By deals volume, all sectors except Mining and Metals recorded a decline; Advanced Manufacturing & Mobility ranked first, 21% of total transactions. M&A activity in this sector was primarily concentrated in industrial product manufacturing and logistics & transportation services.

Regional analysis

North America returns to the top position in M&A value

Driven by a large-scale Mining & Metals transaction by a Chinese enterprise in Canada, North America reclaimed the top position by deal value in Q1, with deal value reaching US$4.7 billion, accounting for 37% of the total, up more than fourfold YoY. Europe remained the second-largest M&A destination, with deal value reaching US$3.8 billion, up 37% YoY, accounting for 30% of the total. Asia continued to lead by number of deals, accounting for more than 40% of the total. However, deal value in Asia declined to US$2.9 billion, down 43% YoY. Latin America recorded deal value of US$600 million, down 68% YoY. Africa and Oceania recorded comparable deal sizes, both registering growth.

From a country perspective, destinations for Chinese enterprises' overseas M&As remained highly concentrated this quarter. By deal value, the top 10 destinations accounted for 91% of the total; among them, Canada, Germany, Norway, the UK and Singapore saw substantial growth in M&A value, mainly driven by large-scale deals. By deal volume, the top 10 destinations accounted for 75% of total transactions. Despite an overall contraction in deal numbers, seven of the top 10 destinations recorded growth.

B&R EPC new contract value defies the overall trend with further rising share, completed turnover maintains steady growth

In Q1 2026, the value of newly signed overseas EPC contracts by Chinese enterprises reached US$55.4 billion, down 5.5% YoY, while new contracts in B&R partner countries totaled US$50.2 billion, up 5.8% YoY, with its share rising further to 90%. Completed turnover reached US$37.3 billion, up 9.2% YoY. Completed turnover in B&R partner countries amounted to US$31.5 billion, up 13.6% YoY¹¹, accounting for 84% of the total.

1. Source: China MOFCOM, EY Analysis
2. Source: London Stock Exchange Group (LSEG), Mergermarket, data including announced but not yet completed transactions, downloaded on 8 April 2026; EY Analysis
3. Source: China MOFCOM, EY Analysis
4. Source: National Bureau of Statistics of China
5. Source: China MOFCOM, in US dollars
6. Source: London Stock Exchange Group (LSEG), Mergermarket, data including announced but not yet completed transactions, downloaded on 8 April 2026; EY Analysis
7. Source: General Administration of Customs of the People's Republic of China, in US dollars
8. Note: The full name is the Recommendations of the Central Committee of the Communist Party of China for Formulating the 15th Five-Year Plan for National Economic and Social Development
9. Source: Global Economic Outlook, the International Monetary Fund (IMF), April 2026. The baseline forecast scenario assumes that the conflict between the US, Israel, and Iran ultimately lasts for a relatively short duration.
10. Source: Geostrategic Outlook, EY-Parthenon, April 2026
11. Source: Monthly Statistics in Brief, China MOFCOM, EY Analysis

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