Growing outward FDI shows West's containment strategy is not working

China's outbound direct investment was $177.29 billion in 2023, up 8.7 percent year-on-year and accounting for 11.4 percent of the global total, an increase of 0.5 percentage points over the previous year. By the end of 2023, China's outward FDI stock had reached $2.96 trillion, ranking third in the world for seven consecutive years, the latest figures show.

China's FDI outflows in Asia and Africa grew rapidly in 2023, with FDI in the countries involved in the Belt and Road Initiative increasing by 31.5 percent year-on-year to reach $40.71 billion, which accounts for 23 percent of total outbound FDI in 2023. By the end of 2023, Chinese investors had set up 48,000 enterprises in 189 countries and regions around the world, 17,000 of which were in countries involved in the Belt and Road Initiative.

China's outward FDI continues to be varied. While nearly 80 percent of the investment flowed to leasing and business services, wholesale and retail, manufacturing, and finance, the investment in construction, and information transmission/software and information technology services showed growth rates of 97.2 percent and 34.9 percent, respectively.

China's outbound FDI is not only boosting the economic development of host countries, but also making ever-greater contributions to the world economy. In 2023, China's imports and exports of goods driven by its overseas investment increased by 6.4 percent, which accounted for 4.6 percent of its total imports and exports of goods in the year. Overseas Chinese enterprises raked in $3.5 trillion in sales revenue, and paid $75.3 billion in taxes to the host countries or regions. By the end of the year, the total number of their employees reached nearly 4.3 million, 60 percent of whom were foreign employees.

China's continuing outbound FDI growth shows Chinese enterprises that have become bigger and stronger have firmly adhered to a "go-global "approach, creating a large number of jobs for local people, and promoting unimpeded trade, flow of funds and people-to-people exchanges between China and the rest of the world.

Despite rising global protectionism, Chinese enterprises have actively expanded their overseas presence through increased investment, helping the country offset the adverse impact of its "external circulation" being disturbed by some forces in the United States and other Western countries, and playing the role of "buffer" in the ever-increasing economic and trade frictions.

China's transformation from a big "capital importing country" to a major "capital exporting country" will have far-reaching impacts on the global economy and trade.

Although the US has intensified its China-containment strategy, China's steadily growing outward FDI shows that the momentum of Chinese enterprises' overseas investment and China's high-quality development have not been curbed.