In Depth: Where Chinese Overseas Investment Is Heading

As Western markets impose stricter regulations, Chinese investments are flowing into emerging economies eager to modernize their industry. These nations are courting Chinese capital in strategic sectors like new-energy vehicles (NEV), semiconductors, technology and infrastructure.

Turkey and Hungary, traditional automotive manufacturing centers, are now aggressively pursuing Chinese investment in electric vehicle (EV) production. Malaysia is leveraging a diversification strategy to attract Chinese semiconductor firms, while Saudi Arabia is seeking Chinese partners to develop its technology, e-commerce and tourism industries so that its economy is less dependent on oil.

Emerging markets are creating favorable investment environments with incentives, relaxed regulations and tax benefits to strengthen local supply chains, which stands in contrast to the increasing trade and technology barriers springing up in Europe and the U.S., according to Ernst & Young’s 2024 China Overseas Investment Overview report.