EY releases the Overview of China outbound investment of H1 2026

• China’s outward direct investment (ODI)¹: China’s overall ODI reached US$86.5 billion in H1 2026, up 8.1% year-on-year (YoY). 
• China’s overseas mergers and acquisitions (M&A)²: Announced deal value reached US$21.4 billion in H1 2026, up 3.6% YoY, exceeding US$10 billion for the third consecutive quarters. The number of deals fell 13% YoY to 191, remained subdued by historical standards.
  • By sector, Mining & Metals emerged as the most active sector, followed by Consumer Products. Healthcare & Life Sciences recorded triple-digit growth in M&A value, while Advanced Manufacturing & Mobility led in deal volume.
  • By region, Asia remained the leading destination. Despite a slight decline in its share of total deal value, it continued to lead in deal volume. Europe was the second-largest destination, with M&A value surging 86% YoY to a near five-year high. Oceania ranked third, with deal value increasing more than tenfold YoY.
• China’s overseas engineering, procurement and construction (EPC)³: In H1 2026, the value of newly signed contracts for Chinese overseas EPC projects reached US$125.6 billion, down 3.3% YoY. Completed turnover reached US$88 billion, up 12.6% YoY.

EY Greater China Region released the Overview of China outbound investment of H1 2026（中文）. According to the report, China's overall ODI reached US$86.5 billion in H1 2026, up 8.1% YoY. Chinese enterprises announced a total of US$21.4 billion in overseas M&A, up 3.6% YoY. The number of announced deals fell 13% YoY to 191, remained subdued by historical standards.

Loletta Chow, EY China Overseas Investment Network (COIN) Global leader and EY Greater China Belt & Road Task Force Leader, says: “In H1 2026, China's economy demonstrated strong resilience, with GDP growing 4.7% YoY.⁴ Meanwhile, overall ODI increased by 8.1% YoY,⁵ while overseas M&A value rose by 3.6% YoY. Goods exports surged by 17.6% YoY,⁶ reflecting the continued momentum of Chinese enterprises’ global expansion.”

“On the policy front, China's first administrative regulation on outbound investment, the Provisions of the State Council on Outbound Investment, came into effect on 1 July. The regulation not only establishes an institutional framework for outbound investment, clarifies measures in areas such as services, management and protection to effectively safeguard the lawful rights and interests of investors and their outbound investments, but also further extends the regulatory focus from the ‘starting point’ of investment filing and approval to the entire process of overseas operations. In particular, it sets out clear requirements for the regulation of cross-border flows of technology, data, and personnel flows, as well as security reviews. In the external environment, the spillover effects of the geopolitical conflict in the Middle East continue to persist, shipping in the Red Sea remains disrupted, global economic recovery is sluggish and global supply chains may face a new round of adjustments.”

“Looking ahead to the second half of the year, Chinese enterprises’ global expansion must closely monitor the risks of abrupt policy shifts and market volatility in key regions, proactively develop alternative plans and contingency mechanisms, and strengthen their operational resilience amid an increasingly complex geopolitical landscape.”

Macro environment: global economic recovery remains uneven, while China's diplomacy and institutional guidance support overseas development

In H1 2026, the global economy experienced a moderate recovery, albeit at a slowing pace. The International Monetary Fund (IMF) lowered its full-year global economic growth forecast to 3.0%, a decrease of 0.5 percentage points compared to 2025.⁷ Geo-economic fragmentation, financial market volatility, constrained fiscal policies, accelerating investment in and adoption of artificial intelligence, and population aging are major forces reshaping the businesses. As Chinese enterprises pursue global development, they must balance resilience with efficiency, accelerate supply chain diversification, reshape operations through artificial intelligence and digitalization, and strengthen global compliance and risk management systems. Against the backdrop of a complex external environment, China has continued to deepen high-level institutional opening-up and provide clear policy guidance. Through high-level diplomacy at multiple levels, China has established regular economic and trade dialogue mechanisms with a number of countries and expanded cooperation in areas such as green economy, digital development and mineral resources. These efforts have helped create a stable and predictable environment for Chinese enterprises to diversify their overseas market presence and advance their global operations with greater confidence.

Overall ODI maintains steady growth, while financial ODI surges 

In H1 2026, China’s overall ODI reached US$86.5 billion, up 8.1% YoY. Non-financial ODI amounted to US$65.7 billion, down 9.0% YoY. Non-financial ODI in B&R partner countries amounted to US$17.5 billion, down 7.4% YoY, accounting for 27% of overall non-financial ODI during the same period.

Overseas M&A value records a slight increase, while deal volume remains at a historic low

In H1 2026, Chinese enterprises announced a total of US$21.4 billion in overseas M&A, up 3.6% YoY, with deal value exceeding US$10 billion for three consecutive quarters. The number of deals stood at 191, marking a 13% YoY decline, with overall deals remaining subdued by historical standards.

Sector analysis

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

By M&A value, Mining & Metals was the most active sector during H1 2026, with total deal value reaching US$5.75 billion, representing a 63% YoY increase. The deals involved a wide range of minerals and resources, including coal, silicone, aluminum, copper and cobalt, and gold, underscoring Chinese companies’ continued efforts to strengthen their presence in minerals and resources. Consumer Products ranked second with a total M&A value of US$3.48 billion. However, the growth notably slowed in the second quarter with only US$430 million in M&A value recorded, down 86% quarter-on-quarter. Healthcare & Life Sciences posted a substantial increase in M&A value (179%), primarily driven by a large transaction in Australia in the second quarter.

By deal volume, Advanced Manufacturing & Mobility, TMT* and Healthcare & Life Sciences recorded the highest numbers of transactions. Advanced Manufacturing & Mobility ranked first in H1. M&A activity in this sector was primarily concentrated in industrial product manufacturing.

Regional analysis

Asia remains the leading M&A destination, while Europe reaches a near five-year high in M&A value

Asia remained the top destination for M&A activities during the period, with M&A value reaching US$6.9 billion, down 43% YoY due to the high base in H1 2025, accounting for approximately 32% of the total. By deal volume, Asia continued to rank first, accounting for 46% of the total, and was the only continent to achieve YoY growth, primarily driven by increased activity in Consumer Products and Healthcare & Life Sciences.

Europe was the second-largest M&A destination, with M&A value reaching US$6.1 billion, a significant 86% YoY increase and a near five-year high, accounting for 28% of the total. Oceania ranked as the third-largest M&A destination, with M&A value reaching US$5.6 billion, representing more than tenfold YoY increase and accounting for 26% of the total, primarily driven by two large transactions. North America recorded M&A value of US$1.8 billion, down 24% YoY, accounting for only 8% of the total – the lowest level on record for the corresponding period in history.

From a country perspective, the top three destinations by deal value during the period were Australia, Singapore, and Germany. Among the top ten destinations, Australia, Germany, Austria, Norway, South Korea and the United Kingdom recorded substantial growth. Driven by warming China-Australia relations and large transactions, Australia became the leading M&A destination for the first time. By deal volume, although overall deal volume declined, Japan, South Korea, Indonesia, Canada, and Italy still recorded significant growth among the top ten destinations, with Japan ranking first in deal volume for the first time.

Overseas EPC new contract value edges down slightly, while completed turnover maintains steady growth

In H1 2026, the value of newly signed overseas EPC contracts by Chinese enterprises reached US$125.6 billion, down 3.3% YoY, while new contracts in B&R partner countries totaled US$114.2 billion, up 0.7% YoY, with their share rising further to 91%. Completed turnover reached US$88.0 billion, up 12.6% YoY. Completed turnover in B&R partner countries amounted to US$75.5 billion, up 16.5% YoY, accounting for 86% 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 6 July 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: General Administration of Customs of the People's Republic of China, in US dollars
7. Source: World Economic Outlook, the International Monetary Fund (IMF), July 2026

-Ends-

EY | Building a better working world

EY is building a better working world by creating new value for clients, people, society and the planet, while building trust in capital markets.

Enabled by data, AI and advanced technology, EY teams help clients shape the future with confidence and develop answers for the most pressing issues of today and tomorrow.

EY teams work across a full spectrum of services in assurance, consulting, tax, strategy and transactions. Fueled by sector insights, a globally connected, multi-disciplinary network and diverse ecosystem partners, EY teams can provide services in more than 150 countries and territories.

All in to shape the future with confidence.

EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients, nor does it own or control any member firm or act as the headquarters of any member firm. Information about how EY collects and uses personal data and a description of the rights individuals have under data protection legislation are available via ey.com/privacy. EY member firms do not practice law where prohibited by local laws. For more information about our organization, please visit ey.com.

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.

Website: ey.com/en_cn/coin