Topic: Foreign direct investment (FDI) from China (2024)

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FDI development in China Investment destinations and sectors Key insights Editor’s Picks Current statistics on this topic Current statistics on this topic Related topics Recommended Recommended statistics Global overview Global overview Size of FDI from China Size of FDI from China Investing entities from China Investing entities from China Investment destinations Investment destinations Invested sectors Invested sectors Further reportsGet the best reports to understand your industry Get the best reports to understand your industry Contact FAQs
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    • With the rapid development of China's globalization process, worldwide investment of Chinese enterprises has experienced rapid growth over the last two decades, reaching its peak with over 196 billion dollars in foreign direct investment (FDI) outflows in 2016. While global FDI slumped dramatically in 2020 due to the COVID-19 pandemic, Chinese FDI outflows even increased against the trend to 153.7 billion U.S. dollars, making China the largest global direct investor for the first time in history.

    FDI development in China

    Driven by China’s fast economic development, the country’s outward investment stock grew quickly from only around 28 billion U.S. dollars in 2000 to nearly 2.8 trillion in 2021. A large part of this investment volume was used for mergers and acquisitions, which attracted the attention of the Chinese government and foreign countries alike and led to stronger market surveillance and lower investment outflows since 2017. Although China is one of the most restricted countries regarding outward FDI flows in comparison with developed nations, the government still encourages its companies to go global and has taken steps to facilitate outward investments in recent years.

    Given China’s important role in global value chains and the low FDI intensity of its economy, there is a huge potential for increased overseas investment. However, as geopolitical tensions are growing and concerns about national security and strategic asset protection is rising, the future development of China’s FDI flows might be strongly influenced by domestic and international political factors.

    Investment destinations and sectors

    A regional breakdown of China’s outward FDI indicates that investment flows are primarily directed towards Asia. However, nearly 60 percent of the total FDI volume in 2021 was transferred to Asia’s financial hub, Hong Kong, and more than ten percent to the Cayman Islands and British Virgin Islands, which makes it difficult to identify final investment destinations. Based on transactional data, it was estimated that in 2020 around 7.2 billion U.S. dollars have been invested in the United States and eight billion in European countries. Sectors receiving the most direct investment from China were leasing and business services, manufacturing, wholesale and retail trade, and financial services.

    This text provides general information. Statista assumes no liability for the information given being complete or correct. Due to varying update cycles, statistics can display more up-to-date data than referenced in the text.

    Published by C. Textor, Nov 11, 2022

    Key insights

    Global FDI outflows 2021
    1.71tr USD

    Topic: Foreign direct investment (FDI) from China (2)

    Detailed statistics

    Value of Foreign Direct Investment (FDI) outflows worldwide 2012-2021

    China's share in global FDI outflows
    10.5%

    Topic: Foreign direct investment (FDI) from China (3)

    Detailed statistics

    China's share in global outward FDI flows 2011-2021

    Leading global investing countries
    United States, Germany, Japan, and China

    Topic: Foreign direct investment (FDI) from China (4)

    Detailed statistics

    Leading countries worldwide 2020-2021, by FDI outflows

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    Editor’s Picks Current statistics on this topic

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    Related topics

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    Global overview

    Size of FDI from China

    Investing entities from China

    Investment destinations

    Invested sectors

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    Topic: Foreign direct investment (FDI) from China (46)

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    Topic: Foreign direct investment (FDI) from China (2024)

    FAQs

    Topic: Foreign direct investment (FDI) from China? ›

    FDI has contributed to higher investment and productivity growth, and has created jobs and a dynamic export sector. China's success, however, did not come without some pitfalls: an increasingly complex tax incentive system and growing regional income disparities.

    Find Out More ›
    How does foreign direct investment affect China? ›

    FDI has contributed to higher investment and productivity growth, and has created jobs and a dynamic export sector. China's success, however, did not come without some pitfalls: an increasingly complex tax incentive system and growing regional income disparities.

    Read More ›
    Why is China's FDI so high? ›

    Local Chinese Market and Business Climate

    The sheer size of China's population makes it an attractive nation for investors to commit capital to higher-end industries like healthcare, information technology, engineering, and luxury goods.

    See More ›
    What is an example of FDI into China? ›

    Examples include NBCUniversal setting up a subsidiary and a joint venture to establish the Universal Beijing Resort. Tesla's 50 billion yuan (US$7.5 billion) gigafactory in Shanghai, or Starbucks' 1.1 billion yuan innovation park in Kunshan in Jiangsu province are also considered examples of FDI into China.

    View More ›
    What is the FDI status in China? ›

    FDI inflows in 2022. In 2022, China's actual use of foreign capital reached RMB 1.2 trillion, up 6.3 percent from the previous year. In US dollar terms, it reached US$189.13 billion, a year-on-year growth rate of 8 percent.

    Show Me More ›
    How much FDI does China have in the US? ›

    China's FDI in the United States (stock) was $38.0 billion in 2020, down 4.2 percent from 2019. China's reported direct investment in the U.S. is led by wholesale trade, manufacturing, and information services.

    Continue Reading ›
    Where does China's FDI come from? ›

    The largest source of foreign direct investment in China is what economist Barry Naughton calls “the China circle”, Hong Kong, Taiwan, and Macau. Among the three locations, Hong Kong has remained the largest source since the mid-1980s.

    Find Out More ›
    Who is the biggest FDI in China? ›

    Who are the investors? International financial hubs play an important role in directing foreign financial streams to China. According to official accounts, more than 50 percent of the inward Chinese FDI stock in 2020 had entered China through Hong Kong, while a substantial share also came from the Virgin Islands.

    Show Me More ›
    Who are the 5 largest investors of FDI in China? ›

    China's main investors have remained broadly stable. Inflows from the US and Europe have dropped, but regional investment has continued to increase as flows from ASEAN countries grow. Singapore, the Virgin Islands, South Korea, the Cayman Islands, Japan, Germany and the United States count among major investors.

    Get More Info ›
    What motivates Chinese investment in the United States? ›

    “The primary motivations for Chinese companies to establish a U.S. presence are two-fold: the vast size of the market, and its leading business mindset,” the survey report said.

    Tell Me More ›

    How much of China's economy is FDI? ›

    China Foreign Direct Investment: % of Nominal GDP data is updated quarterly, available from Mar 1998 to Mar 2023. The data reached an all-time high of 6.9 % in Dec 2006 and a record low 0.3 % in Sep 2022.

    Learn More Now ›
    How big is China's FDI? ›

    In recent years, China has been the second largest recipient of foreign direct investments (FDI) worldwide, attracting approximately 181 billion U.S. dollars in 2021.

    Learn More Now ›
    Does China receive a lot of FDI? ›

    China's official FDI statistics show that it became the world's largest recipient of FDI in 2020 and continued to attract investment from abroad at a high level in 2021 and through 1H 2022.

    Get More Info ›
    When did China allow FDI? ›

    From the beginning of China's gradual opening to the world 45 years ago, China has always exercised tight control over all aspects of FDI. It was not until 1986 that China first allowed wholly foreign-owned enterprises in a limited range of sectors.

    Find Out More ›
    Where does China invest the most? ›

    Sectors receiving the most direct investment from China were leasing and business services, manufacturing, wholesale and retail trade, and financial services.

    Find Out More ›
    What is China's attitude toward FDI? ›

    China's laws and regulations on FDI also include related preferential policies and stipulations for special economic zones in the country. In a nutshell, China encourages favorable FDI policies. Therefore, FIEs enjoy preferential treatment when compared to domestic enterprises.

    Know More ›
    How much have US companies invested in China? ›

    U.S. companies spent about $11 billion in 2022 buying or investing in Chinese companies, according to the data service firm Dealogic.

    Discover More ›
    Did China surpass US in FDI? ›

    China surpasses U.S. as largest recipient of foreign direct investment during Covid pandemic. China brought in $163 billion in inflows last year, compared to $134 billion attracted by the U.S., the United Nations Conference on Trade and Development wrote in a report released on Sunday.

    Get More Info ›
    What are the top 3 things the US buys from China? ›

    Top 10 Most-Imported Products From China
    • Smartphones ($50.2 billion)
    • Automatic digital processing machines ($49.2 billion)
    • Wheeled toys, inflatable balls, puzzles and scale models ($16.3 billion)
    • Video game consoles and console parts ($10.2 billion)
    More items...
    Feb 10, 2023

    Explore More ›
    Why does the US keep borrowing money from China? ›

    China's demand for Treasurys helps keep U.S. interest rates low. It allows the U.S. Treasury to borrow more at low rates. Congress can then increase the federal spending that spurs U.S. economic growth.

    Know More ›

    Why does China loan the US money? ›

    U.S. debt offers the safest heaven for Chinese forex reserves, which effectively means that China offers loans to the U.S. so that the U.S. can keep buying the goods China produces.

    View More ›
    How do foreign investors invest in China? ›

    For most foreign investors, the best way to gain exposure to China is via a mutual fund or ETF, or by investing in a company in your country doing lots of business there.

    Keep Reading ›
    How will the amount of FDI currently being invested impact China? ›

    Our results show that FDI has a significant and positive direct impact on China's economic growth and technological innovation, and can furthermore have a significant pull effect on the domestic economy through the backward spillover channel.

    Get More Info ›
    How does international trade affect economic performance in China? ›

    The study demonstrates that increasing participation in the global trade helps China reap the static and dynamic benefits, stimulating rapid national economic growth. Both international trade volume and trade structure towards high-tech exports result in positive effects on China's regional productivity.

    Read More ›
    What is the effect of foreign direct investment? ›

    Job Creation and Employment: Most foreign direct investment is designed to create new businesses in the host country, which usually translates to job creation and higher wages. Technology Transfer: Foreign direct investment often introduces world-class technologies and technical expertise to developing countries.

    Get More Info ›
    What are the benefits of inward FDI to China? ›

    Inward FDI contributes to the PRC's economic growth and industry development, increases tax revenue, and improves labor quality. The contribution of inward FDI to gross domestic product averages around 3%–6%.

    View More ›
    Who are the largest FDI investors in China? ›

    Among the main sources of investment, FDI into China increased from France (635.5 percent), Germany (60.8 percent) and the United Kingdom (680.3 percent).

    Read More ›
    Who is China's largest foreign investor? ›

    Singapore and China are celebrating the 30th anniversary of the establishment of our diplomatic relations in 2020. Since 2013, China has been Singapore's largest trading partner, and Singapore has been China's largest foreign investor.

    Know More ›
    How does the US economy benefit from trade with China? ›

    Why it matters: The United States imports roughly half a trillion dollars in goods from China, including clothing, shoes, electronics, furniture, and household appliances. Those imports help improve the lives of many Americans, particularly those in low-income households who benefit from lower prices on everyday goods.

    Get More Info ›
    How much does China rely on foreign trade? ›

    As reported by WTO in 2023, exports of goods in 2021 were USD 3,363.8 billion and imports USD 2,688.6 billion, while exports and imports of services in 2021 reached USD 390.6 billion and USD 438 billion respectively.

    Explore More ›

    Why is China so important to the global economy? ›

    It is one of the world's fastest growing countries and is the tenth largest exporter. China is also a significant recipient of foreign aid and a major borrower on international capital markets.

    See Details ›
    What is a disadvantage of foreign direct investment? ›

    Disadvantages of FDI

    hinder domestic investments and transfer control of domestic firms to foreign ones. risk political changes, exposing countries to foreign political influence. influence exchange rates. Influence interest rates.

    Read On ›
    Is foreign direct investment good or bad? ›

    FDI allows the transfer of technology—particularly in the form of new varieties of capital inputs—that cannot be achieved through financial investments or trade in goods and services. FDI can also promote competition in the domestic input market.

    See More ›
    What is the downside of foreign direct investment? ›

    Some potential disadvantages of foreign direct investment (FDI): The host country can lose control over its economy, and people may lose jobs if companies relocate production to lower-cost countries.

    Explore More ›
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