China | The music still goes on... somewhere in the world

Summary

China’s Outward Direct Investment (ODI) flows are undergoing a structural reconfiguration driven by geopolitical risk and protectionism. Investment is shifting sharply away from Global North countries and toward the Global South due to increased scrutiny. Future expansion will emphasize deep localization in key regions.

Key points

• Key points:
• ODI fell in the first half of 2025, but investment in Belt and Road Initiative countries surged against the trend.
• Investment in North America and Europe plummeted due to geopolitical scrutiny; Asia leads as the top destination, while Africa surged to become the second-largest.
• Investment focuses strategically on securing critical resources, with Metal mining, Energy, and Transportation dominating.
• Private-Owned Enterprises are the leading investors in high-growth sectors, preferentially using Mergers & Acquisitions over Greenfield projects for speed and risk mitigation.
• Driven by structural pressures, future ODI will emphasize deep localization in key new hubs: ASEAN, the Middle East, and Latin America.Strategic sectors fuel a global, innovative industrial shift.

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