China Continues Upstream Expansion in Supply Chains: Q3 2025 Update

Investment momentum

New data from the China Cross-Border Monitor (CBM) shows 138 major FDI transactions by Chinese companies in Q3 2025 totaling an estimated $29.9 billion.

Greenfield investment remained the dominant mode of entry for Chinese outbound investment, totaling $23.9 billion and accounting for 80% of total investment. Only five transactions over $1 billion were recorded this quarter, against an average of seven since 2024. The largest transaction was a $5.9 billion investment led by Tongkun Group, a leading Chinese polyester and chemical fiber producer, in an integrated refining and chemical complex in Indonesia.

New M&A transactions by Chinese firms totaled $6 billion, marking the strongest quarter of the year. They were driven by a rebound of Chinese M&A in Europe and Asia, which accounted for 97% of total acquisitions this quarter. The largest transaction was JD.com’s announced $2.5 billion voluntary takeover bid for Germany’s Ceconomy, parent of the MediaMarkt and Saturn electronics chains.

The third quarter saw several notable transaction status updates. COSCO entered discussions to acquire stakes in CK Hutchison’s $22.8 billion ports portfolio and a $2.3 billion Panama Canal development. Australia's Peak Rare Earths approved a bid from Chinese rare earths producer Shenghe Resources to acquire the company for $96 million. Multiple EV value chain projects broke ground, including CATL’s $1.5 billion EV battery complex in Indonesia, Gotion’s $1.2 billion battery plant in Slovakia, and BYD’s $1.0 billion EV assembly plant in Brazil. In Finland, TikTok commenced construction of its $1.0 billion data center, while Okmetic began production at its $422 million semiconductor wafer plant. In Nigeria, Huaxin Cement completed its $1.0 billion acquisition of 83.81% stake in Lafarge Africa. Global New Material finalized its $720 million acquisition of Merck’s global Surface Solutions business in Germany. Finally, Ganfeng completed acquisitions of stakes in two lithium projects: 40% of the Goulamina mine in Mali for $343 million, and 45% in the Avalonia project in Ireland for $1.84 million.

The third quarter also saw several troubled Chinese investments. The US treasury secretary raised objections to Nongfu Spring’s $67 million land purchase in New Hampshire, while Utah authorities blocked a land transaction involving Aviation Industry Corporation of China. In Taiwan, Dongshan Precision’s plan to acquire 100% of Source Photonics, valued at up to $687 million, came under review by both Taiwanese and US regulators. TikTok continued to face political backlash in the US, where the terms of a potential deal to transfer its US operations to a domestic owner were outlined, and in Brazil, where an indigenous community filed for the cancellation of the company’s planned $2.5 billion data center. Meanwhile, BYD’s $1.0 billion EV plant in Turkey drew parliamentary criticism over delays in breaking ground despite a tariff waiver, and the company formally withdrew its planned $600 million EV assembly factory in Mexico.

Investment by sector

The top sectors for Chinese outbound investment in Q3 2025 were basic materials, consumer products, and energy. 

With total announced investment of $12.6 billion, the basic materials, metals, and minerals sector retained its position as the top destination for Chinese capital, recording the strongest quarter since the start of the COVID-19 pandemic. The largest transaction was a joint venture between Tongkun Group, Xinfengming Group, and Tsingshan Group for a $5.9 billion investment in a refining and chemical complex in Indonesia, following the signing of a memorandum of understanding (MoU) with Indonesia’s Coordinating Ministry for Economic Affairs. New investment in raw materials processing for the EV value chain remains strong. In Argentina, Ganfeng announced a $2 billion investment in the Pozuelos-Pastos Grandes lithium mining project in Salta province. In Indonesia, GEM partnered with Danantara, a local sovereign wealth fund, on a $1.4 billion high-pressure acid leach nickel project, while Changzhou Liyuan New Energy Technology committed $250 million to a lithium iron phosphate cathode plant. Other notable investments include Zijin Mining $1.2 billion acquisition of the Raygorodok gold mine in Kazakhstan.

The consumer products and services sector came in second place with $4.9 billion in total investment, recording its strongest quarter since COVID-19, driven by two major acquisitions from JD.com. In Europe, JD.com announced a $2.5 billion voluntary takeover bid for Germany’s Ceconomy. In Asia, JD.com acquired a 70% stake in Hong Kong’s Kai Bo Food Supermarket for $509 million. Beyond acquisitions, Jason Furniture (Hangzhou) committed $156.8 million to a new production base in Indonesia and Shanghai Challenge Textile invested $150 million in a facility within Pakistan’s Punjab special economic zone.

The energy sector ranked third, attracting $3.3 billion in total investment and retaining its position from the previous quarter. Activity was led by upstream oil and renewable energy projects across Africa and Asia. In the Republic of the Congo, Wing Wah committed an an estimated $1.46 billion to develop the Holmoni and Banga Cayo oil blocks in Kouilou and Fujian Longking launched a $319 million hydropower and transmission project in Haut-Lomami. In Turkey, Astronergy announced a $700 million greenfield project for wafer and solar cell manufacturing in Balıkesir. In Asia, China Energy Overseas Investment invested $320 million in the Sauran 300 MW solar power plant in Turkestan, Kazakhstan and Dongbaishan Holding Group partnered with SL Sunlight on a $500 million solar energy facility in Kampong Speu, Cambodia.

Investment by geography

Asia was the top destination of Chinese capital in Q3, followed by Africa and Europe.

Asia ranked first, attracting $15.4 billion, a record since the post-COVID rebound and 52% of total announcement this quarter. 73% of investment was concentrated in ASEAN. In Indonesia, leading transactions included Tongkun Group’s $5.9 billion refining and chemical integration project and GEM’s $1.4 billion nickel smelting and battery materials facility. Galaxy Data Center, a Chinese infrastructure developer backed by Hoyinn Technologies, committed an estimated $2.0 billion to a new facility in Rayong, Thailand. Central Asia attracted 10% of total investment. Shanghai Linkwise announced a $600 million investment in a 300MW data center in Uzbekistan’s Bukhara region. Zijin Mining acquired the Raygorodok gold mine in Kazakhstan for $1.2 billion.

Africa ranked second, attracting $4.4 billion in new Chinese investment, driven by big commitments in oil, power, and renewables: Wing Wah invested an estimated $1.46 billion to develop the Holmoni and Banga Cayo oil blocks in the Republic of the Congo, and Fujian Longking committed $319 million to a hydropower plant and transmission line in the Democratic Republic of the Congo (DRC)’s Haut-Lomami province. Mining projects also featured, concentrated in Zimbabwe: Bikita Minerals, a subsidiary of Sinomine Resource, announced a $400 million lithium smelter and Tsingshan Holding Group announced a $800 million commitment to the Dinson Chivhu iron and steel plant. One other notable transaction was Shandong Linglong Tire announcement of a $800 million tire factory in Kenya.

Europe ranked third, attracting $3.2 billion in new Chinese investment, mostly driven by acquisitions. The largest transaction was JD.com’s $2.5 billion planned acquisition of Germany’s Ceconomy. JD.com had also explored takeovers of UK retailers Currys and Argos earlier this year, but both negotiations fell through. In high-tech manufacturing, San’an Optoelectronics acquired Lumileds Holding, a global supplier of LED and automotive lighting components, for $210 million, while DeFu Technology acquired Circuit Foil Luxembourg, a producer of copper foils used in electronics and batteries, for $201 million.