BEIJING — China's annual outbound direct investment (ODI) exceeded $200 billion for the first time on record. With Chinese companies accelerating their overseas expansion, more than 60% of the total went to Hong Kong, prompting analysts to say the city is expanding its role as a conduit for Chinese capital moving abroad and for indirect investment.
China's ODI reached $213.58 billion last year, up 11.1% from a year earlier, according to the 2025 Statistical Bulletin of China's Outward Foreign Direct Investment released jointly on the 29th by the Ministry of Commerce, the National Bureau of Statistics and the State Administration of Foreign Exchange. It was the first time annual investment topped $200 billion, and China reclaimed its position as the world's second-largest source of outbound direct investment.
By region, the concentration in Asia became more pronounced. China's investment in Asia rose 15.3% last year, accounting for 82.9% of total ODI, a 3 percentage point increase from the previous year. Investment in the United States and Africa declined, while investment in Europe edged up.
Hong Kong effectively drove the increase in Asian investment. China's investment in Hong Kong rose 18.4% to $137.47 billion last year, making up 64.4% of total ODI, up 4 percentage points from 60.4% in 2024. Excluding Hong Kong, China's investment in the rest of Asia totaled $39.69 billion, a gain of just 5.7% from a year earlier.
In detail, flows to the Association of Southeast Asian Nations (ASEAN) and the Middle East moved in opposite directions. China's investment in ASEAN fell 10.4% to $30.78 billion last year from a record $34.37 billion in 2024. Investment declined across Singapore, Indonesia, Vietnam, Cambodia and Brunei.
Investment in the Middle East, by contrast, more than doubled to $3.767 billion from $1.855 billion. The United Arab Emirates led the gain, drawing $2.6 billion, more than triple the previous year's figure.
Not all Chinese money flowing into Hong Kong stays there. The city serves as a base for Chinese companies expanding overseas while also acting as a way station for "round-tripping" investment that returns to the mainland and for investment bound for third countries. As of the end of 2024, 52.1% of Hong Kong's cumulative outbound direct investment went to mainland China and 27.6% flowed to the British Virgin Islands (BVI).
Analysts say some of the money counted as "investment in Hong Kong" in Chinese statistics is in fact routed through special purpose vehicles (SPVs) set up in Hong Kong or the BVI and used for third-country investment, such as building factories in Southeast Asia or acquiring European companies. In Vietnam's foreign direct investment (FDI) last year, mainland China and Hong Kong ranked as the second- and third-largest investors, with $5.7 billion and $1.7 billion, respectively.
A Hong Kong economist who asked not to be identified told Caixin that China's model of capital export is itself changing as Chinese companies expand their overseas investment. In the past, the economist said, government-led capital export centered on purchases of U.S. Treasuries using the country's vast foreign exchange reserves, but direct investment by private companies — building factories abroad and pursuing mergers and acquisitions — is now growing rapidly against a backdrop of slowing domestic demand and improving corporate competitiveness.
