China’s outbound investment surges to 7-year high amid data centre, energy boom

China’s global outbound direct investment surged to a seven-year high in 2025 as Chinese firms pivoted their capital towards strategic raw materials and data centres, according to a report by Rhodium Group released on Wednesday.

The latest China Cross-Border Monitor report found that Chinese firms announced US$124 billion of new outbound direct investment last year, an 18 per cent jump from 2024 and the highest level recorded since 2018. Completed deals also saw a robust 14 per cent increase to US$73 billion, signalling a steady recovery from pandemic-era lows.

However, the report stressed that this “offshoring” trend was still being far outpaced by China’s massive export machine, with the country logging a record goods trade surplus of nearly US$1.2 trillion in 2025.

Chinese firms’ newly announced investment in offshore manufacturing facilities fell across all regions except for North Africa last year, with a particularly significant drop in Central and Eastern Europe, the report said.

“Big greenfield projects by companies like BYD have captured headlines, but the reality is that Chinese firms have built out manufacturing capacity at home at a much faster pace than production outside China since the pandemic,” the report said, noting that Beijing’s concerns over technology leakage were creating new headwinds for overseas expansion.

China’s official data showed that total outbound investment reached nearly US$174.4 billion in 2025, up 7.1 per cent year on year. Rhodium attributed the gap between its findings and the official figures to Chinese firms holding US dollars at overseas subsidiaries rather than converting them back into onshore yuan assets.

The report also highlighted a shift in China’s investment priorities away from the previously dominant automotive sector towards raw materials and energy.

South China Morning Post