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EY releases the Overview of China outbound investment of 2021

Higher investment growth was observed in Belt and Road region; health care and life sciences sector in Europe and North America was popular


  • China’s overall outward direct investment (ODI) reached US$145.2 billion in 2021, up 9.2% year-on-year (YOY), whilst non-financial ODI reached US$113.6 billion, up 3.2% YOY. Belt and Road (B&R) non-financial ODI increased 14.1% YOY, which continued to outperform the overall growth rate.

  • The announced value of China overseas mergers and acquisitions (M&As) reached US$57 billion, up 19% YOY but down 28% compared to 2019. There were 516 announced deals, down 4% YOY, marking the lowest in seven years.

    • By deal value, the top three sectors were TMT*, real estate, hospitality & construction, as well as advanced manufacturing & mobility. By deal volume, the top three sectors were TMT, health care & life sciences and financial services, accounting for 60% of the overall. Health care & life sciences was the only sector recording increases in both deal value and volume for two consecutive years, with Europe recording the largest growth. The pandemic continued to accelerate the development of health care & life sciences.

    • Asia was the top investment destination for the year representing 46% of the overall Chinese overseas M&As in the period, up 85% YOY. Asia also recorded more large projects compared to 2020. Europe was the most popular major continent by deal volume during the year. Top five investment destinations by value were Singapore, the US, South Korea, Netherlands and Indonesia.

Newly-signed China overseas engineering, procurement and construction (EPC) projects increased 1.2% YOY to US$258.5 billion. There were more major projects in transportation.

*Note: The TMT sector refers to technology, media & entertainment and telecommunications

EY today releases the Overview of China outbound investment of 2021. China’s overall ODI in 2021 increased 9.2% to US$145.2 billion1. The announced China overseas M&A value reached US$57 billion, up 19% YOY. Asia was the top overseas M&A destination representing 46% of the overall in the period. The top sectors were TMT*, real estate, hospitality & construction, as well as advanced manufacturing & mobility2.


Loletta Chow, Global Leader of EY China Overseas Investment Network (COIN), says: “The ongoing and resurgence of the pandemic gave rise to a spectrum of challenges. Economic recovery of countries and regions during the year fell short of expectation and varied with considerable divergences. The IMF’s January 2022 World Economic Outlook Update expected the global growth to increase 4.4%, half a percentage point lower from its previous estimate. China’s economy realized an 8.1% increase in 2021 showing some levels of resilience. Yet, the external environment got progressively complex and uncertain and domestic economy faced three-pronged pressures of contraction of demand, supply shocks and weaker expectations3. New challenges are on the horizon in 2022. Nonetheless, EY identified three trends of China overseas investment for cautious optimism: 1) China would make further use of the manufacturing advantages to explore and deeply participate in reshaping the global industrial and supply chains; overseas greenfield investment is on the rising trend; 2) the health care and life sciences would continue to be a leading sector in China overseas M&As; digitalization may help medical services extend from disease curing to health care leading to diversified and multi-disciplinary investment in this sector; 3) investment in green and sustainable development would gradually pick up to be a key contributor for expanding international cooperation of Chinese enterprises.”

China outbound investments developed steadily with a higher proportion of greenfield

The data from MOFCOM showed that China’s overall ODI reached US$145.2 billion in 2021, up 9.2% YOY, exceeding the 2019 pre-pandemic level (US$136.9 billion). Chinese domestic investors made a total non-financial ODI of US$113.6 billion to 6,349 overseas enterprises globally in 166 countries and regions, up 3.2% YOY. The B&R non-financial ODI reached US$20.3 billion, up 14.1% YOY, representing 17.9% of the total non-financial ODI, up 1.7 percentage points YOY, mainly to ASEAN, Bangladesh, the UAE, Kazakhstan, etc.

In these years, China overseas M&As experienced higher volatility whereas China’s ODI has steadily developed with more overseas greenfield investment amid stricter foreign investment scrutiny on cross-border M&As. Looking ahead, the trend of participation by Chinese enterprises in the global industrial chain will endure and Chinese overseas greenfield investment will continue.


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