China’s slowing overseas investment reflects caution, not retreat

South China Morning PostCenter-RightEN 2 min read 100% complete by David Tingxuan ZhangJanuary 28, 2026 at 02:30 AM

AI Summary

short article 2 min

China's outbound direct investment growth slowed significantly in 2025, increasing by only 1.3% compared to double-digit growth in previous years. However, this slowdown reflects a strategic reorientation rather than a retreat from overseas investment. Investment in Belt and Road Initiative partner economies increased at a faster pace, up 19% year-on-year. This shift is driven by increased scrutiny and regulatory hurdles faced by Chinese firms in advanced economies, including investment screening, security reviews, and political considerations. Consequently, Chinese companies are redirecting investments towards regions with more favorable policy conditions, industrial demand, and geopolitical risk profiles.

Key Entities & Roles

Key Player Opposition Context

European Union ×260% Ministry of Commerce ×270% Belt and Road Initiative 70% China ×490%

Keywords

outbound investment 100% china 90% belt and road initiative 80% economic slowdown 70% investment screening 60% geopolitical risk 60% ministry of commerce 50% regulatory interventions 50% foreign aid 40%