FDI in China: The blockbuster deals in 2018

At a time of great economic uncertainty, with global foreign investment dipping to its lowest level in a decade, China remains a popular destination for international investors.

China hosted nearly 1,700 major foreign direct investment (FDI) projects in 2018 with contract values above $50 million, up 23.3 percent from the previous year, according to the Commerce Ministry. The FDI in China rose 3 percent to $135 billion last year, setting a record high.

The modest but steady growth is in sharp contrast to the worldwide downturn as global FDI fell by nearly a fifth last year to an estimated $1.2 trillion, according to the latest UNCTAD Global Investment Trends Monitor, a drop that brought FDI flow to its lowest point since the global financial crisis in 2008. The situations would have been inarguably worse if not for the resilient economies in developing countries that kept attracting foreign investments.

Those rare FDI oases include of course China, which rolled out a series of measures last summer to reduce restrictions on foreign investment in a wide range of sectors including banking, the automotive and heavy industries, and agriculture.

As a result, more investors came to China, establishing over 60,000 new firms in 2018, up nearly 70 percent from the year before. Investments from Britain and German in particular jumped up 150 percent and 80 percent respectively, a strong indicator of their confidence in China’s growth. There were so many foreign-invested projects that not all of them were necessarily reported in the news, but a few blockbuster deals, listed here, did make headlines around the world.

$10 Billion: ExxonMobil in Guangdong

In September, ExxonMobil, the US oil and gas behemoth, signed deals with China to invest $10 billion in the southern province of Guangdong. The proposed projects include a petrochemical complex as well as a LNG terminal.

$7.25 Billion: Tesla in Shanghai

Announced in July, electric carmaker Tesla's first plant outside the US, the Gigafactory 3, with a total investment of 50 billion yuan ($7.25 billion), will eventually have a production capacity of 500,000 units. The massive facility, located in Shanghai’s Lingang industrial zone, will be the city’s biggest foreign investment to date.

$3.5 Billion: BMW in Liaoning

In October, German luxury carmaker BMW said it will invest more than 3 billion euros ($3.5 billion) in new and existing plant structures in Shenyang over the coming years, and also plans to take a majority stake in its Chinese joint venture, the first move by a foreign automaker to seek control of local partnerships in China.

$10 Billion: BASF in Guangdong

BASF, the German chemical giant, said in July that it plans to invest $10 billion in Guangdong to build China’s first wholly foreign-owned chemicals complex. The project includes an ethylene unit with annual production capacity of 1 million tons.

$18 Billion: Volkswagen’s long term bet

In April, auto giant Volkswagen said it will invest 15 billion euros ($18.3 billion) in the Chinese market by 2020 to develop new energy vehicles and automated driving in an attempt to gain an edge in electric vehicles in the world’s largest auto market.

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