China’s overseas investment hits record US$214 billion. Why are US-bound flows plunging?

China’s outbound direct investment reached a record high of US$214 billion last year, even as investment in the United States plunged to its lowest level in more than a decade amid growing geopolitical and regulatory uncertainty, latest official data showed.

Outbound direct investment was up 11.1 per cent in 2025 compared to the previous year, making China the world’s second-largest source of global capital, behind only the US and ranking ahead of Japan, according to an annual report jointly issued by the Ministry of Commerce and two other state economic bodies on Wednesday.

This growth was partly driven by stronger investment in technology-related industries. Investment in information transmission, software and information technology services surged 88.3 per cent to reach US$13.1 billion as Chinese companies expanded their presence in such sectors abroad.

Bucking that trend was direct investment to the US, which fell 71.3 per cent to US$1.91 billion – down sharply from about US$6.63 billion in 2024 and the lowest level since 2011. The US accounted for only 0.9 per cent of China’s total outbound direct investment in 2025, according to the report.