China's $100B Investment Pivot: From West to Rest

2.6%. That's all of China's foreign direct investment that went to North America in 2025. A decade ago, it was 27%—more than ten times higher.

This dramatic shift, captured in new data from Rhodium Group, tells the story of how quickly Chinese companies are turning their backs on the West. Looking at all FDI transactions worth more than $5 million, North America, Europe, and Oceania combined now attract less than 20% of Chinese investment, down from 70% in 2016.

The numbers reflect more than just changing business preferences—they reveal a fundamental rewiring of global capital flows driven by escalating geopolitical tensions.

When Regulation Becomes Rejection

The reasons behind this investment exodus are stark. The U.S. has systematically tightened the screws on Chinese companies through export controls, investment screening, and regulatory hurdles, particularly in advanced technology sectors like semiconductors and artificial intelligence.

Real-world casualties tell the story. Last October, Hefei-based battery maker Gotion abandoned its $2.4 billion Michigan plant after years of legal and political resistance to its Chinese ownership. In January, U.S.-based HieFo Corporation was forced to divest semiconductor assets simply because one co-founder was Chinese. Six months earlier, China-linked tech firm Suirui had to give up ownership of audiovisual equipment company Jupiter Systems over national security concerns.

These aren't isolated incidents—they're part of a pattern that's made Chinese companies view America as "unpredictable and volatile," according to Danielle Goh, senior research analyst at Rhodium Group. "There's growing risk that projects may not ultimately move forward, so Chinese companies have been reluctant to invest heavily," she explained.

The Great Pivot: Where Chinese Money Goes Now

So where is China's $100 billion in 2025 greenfield investment flowing instead? The answer reshapes our understanding of global economic geography.

Asia emerged as the clear winner, attracting around $40 billion in new transactions. This wasn't just manufacturing—Chinese companies poured money into data centers, raw materials mining and processing, creating new regional hubs that bypass Western markets entirely.

The Middle East and North Africa drew investment primarily through large-scale manufacturing and clean energy projects, while sub-Saharan Africa attracted major commitments in energy and materials processing. Even Latin America is positioning itself as a promising nearshoring location, allowing Chinese companies to serve U.S. markets while circumventing tariffs and trade barriers.

Interestingly, while automotive investments lost steam—reflecting the sector's maturity and overcapacity issues—data centers, raw materials, and consumer goods took the top spots. This shift suggests Chinese companies are building infrastructure for a post-Western economic order.

Beyond Economics: The Geopolitical Chessboard

This investment reallocation isn't just about business—it's about power. China is essentially creating alternative economic ecosystems that reduce dependence on Western markets and supply chains. By investing heavily in Asia, Africa, and the Middle East, Chinese companies are building relationships and infrastructure that could reshape global trade patterns for decades.

For Western policymakers, the data presents a paradox. The very measures designed to contain Chinese influence may be accelerating China's pivot toward building stronger ties with the Global South. Countries that once competed for Chinese investment are now benefiting from this redirection of capital.

The timing is particularly significant given the uncertainty surrounding Trump administration policies. As Goh noted, Chinese companies are hedging against policy volatility by diversifying their geographic exposure—a rational response that may have unintended long-term consequences for U.S. economic influence.