According to a report on the Bloomberg News website on April 26, Chinese companies are investing overseas at the fastest pace in eight years.

       The report says that as China's leading enterprises build more factories overseas, China's overseas investment is heading for its highest point in eight years, a shift that could soften criticism of Beijing's export boom.

       Data released last week showed that China's non-financial outbound direct investment in the first quarter of this year reached nearly 243 billion yuan. This is the highest figure for the first quarter since 2016, representing a nearly 13% increase from the same period last year.

      The report also noted that Chinese enterprises in industries leading their global rivals—such as electric vehicles and solar energy—are at the forefront. These investments create jobs and economic growth in overseas markets, rather than causing local producers to go bankrupt through massive exports, which may help ease trade tensions.

       Citing Alicia García-Herrero, chief economist for Asia-Pacific at Natixis, the report stated: "China hopes to produce overseas to reduce trade surpluses. I expect this pace to be actively maintained, but they will still face protectionism."

       In the 1980s, Japan leveraged overseas investments by its world-leading automakers to ease diplomatic tensions, but it was not viewed as a strategic rival to the U.S. as China is today. Bert Hofman, a professor at the National University of Singapore and former director of China Affairs at the World Bank, said this means Beijing may not be able to follow the same path. He noted that the U.S. and Europe "harbor enormous suspicion of Chinese investments."

       Another report released this week shows that China's manufacturing investment in ASEAN surged, nearly tripling last year and being nearly twice the combined total of investments from U.S., South Korean, and Japanese enterprises.

      Chinese companies have invested heavily in key raw material processing sectors, such as nickel mines and smelters in Indonesia. They are also making downstream investments. Chery Automobile Company this week announced plans to become the latest Chinese automaker to set up a factory in Thailand, aiming to start producing electric vehicles (EVs) next year.

      This month, Chery also signed another agreement to acquire an old Nissan factory in Spain and produce EVs there. As the world's largest EV manufacturer, BYD officially broke ground on its factory in Brazil last month—the company's first EV plant outside Asia—with production scheduled to begin in early 2025. BYD also has a major project in Hungary, which has become a hub for China's commercial activities in Europe.

      The report adds that in the solar energy sector, Chinese manufacturers—who dominate global production—are seeking to increase overseas investments as many countries feel uneasy about relying on a geopolitical rival for equipment crucial to the energy transition.

      Longi Green Energy and Trina Solar have announced plans to build factories in the U.S., where they can access generous government subsidies as part of the Biden administration's push to develop renewable energy.

       The increase in factory construction marks a shift away from infrastructure investment, which until recently constituted the main focus of China's overseas spending.