By Hasan Muhammad

Editor's Note: The writer is a freelance columnist on international affairs based in Karachi, Pakistan. The article reflects the author's opinions and not necessarily the views of China Economic Net.

In February 2025, Bolivia's President Luis Arce inaugurated the Chinese-funded Mutun steel industrial complex near Puerto Suarez, on the Bolivia-Brazil border. This facility, capable of producing 200,000 metric tons of steel annually, meets half of Bolivia's domestic demand for rebar and wire mesh, generating significant economic value. It exemplifies how strategic investments can support industrial development and economic resilience in resource-dependent economies, fostering growth through targeted collaboration.

China's outward foreign direct investment has continued to expand steadily, tackling global economic challenges. According to the 2024 Statistical Bulletin from China's Ministry of Commerce and the State Administration of Foreign Exchange, outward investment reached 192.2 billion dollars in 2024, up 8.4 percent from the previous year. The cumulative stock of these investments stood at 3.14 trillion dollars, maintaining China's position among the global top three for eight consecutive years. By the end of 2024, Chinese enterprises had established 52,000 overseas companies across 190 countries and regions, covering over 80 percent of the world's nations, with 70 percent of these ventures reporting profits or breaking even.

A key driver of this expansion is the Belt and Road Initiative, with 19,000 companies operating in partner countries, accounting for over 20 percent of total investments in 2024. Asia absorbed nearly 80 percent of China's outward flows, growing 8.5 percent year-on-year, with investments in the Association of Southeast Asian Nations rising 36.8 percent to 34.36 billion dollars. Investments also surged in Oceania by 113.7 percent, Europe by 25.3 percent, and Latin America by 15.4 percent, reflecting a strategy to diversify and strengthen economic ties globally.

These investments generate substantial economic impacts. In 2024, Chinese overseas enterprises drove 211 billion dollars in goods exports from China, a 13 percent increase, representing 5.9 percent of national exports. Their sales revenue reached 3.6 trillion dollars, with 82.1 billion dollars paid in taxes to host countries. Employment figures highlight the human impact: a workforce of 5.021 million, 65.8 percent of whom are local hires. In Bolivia's Mutun project, financing from the Export-Import Bank of China and operations by Sinosteel Engineering & Equipment ensured technology transfers, enhancing local capabilities while supporting economic growth.

In 2025, global investment faced challenges, with worldwide foreign direct investment dropping 11 percent to 1.5 trillion dollars in 2024, marking a second consecutive decline. China's outward flows reflected this trend, totaling 80 billion dollars in the first half of 2025, down 6.2 percent from the previous year, partly due to United States tariffs affecting investments in April and May. However, early 2025 saw concentrated investments in energy, basic materials, and infrastructure, with Indonesia and Brazil as key recipients, particularly in resource and energy projects.

The Belt and Road Initiative remained a stabilizing force. The first half of 2025 recorded 66.2 billion dollars in construction contracts and 57.1 billion dollars in direct investments, surpassing previous highs. Engagement grew in the Middle East, with increased private sector involvement diversifying project delivery. In Latin America, the Mutun plant's operational start in February supported Bolivia's economic recovery by reducing import reliance. In Asia, initiatives like the 10th Belt and Road Summit in September 2025, where Hong Kong signed one billion dollars in deals, reinforced collaborative efforts.

Critics often view these investments through a geopolitical lens, suggesting they primarily serve China's strategic interests. Yet, the data tells a different story: projects like the Belt and Road foster mutual economic benefits. In Cambodia, infrastructure developments have improved connectivity, supporting national progress without the drawbacks critics claim. Across the global south, China's approach offers an alternative to conditional lending, emphasizing capacity building and equitable trade. Expanding into areas like Arctic routes and Panama's logistics shows adaptability to global needs, prioritizing cooperation over competition.

Environmentally and socially, these investments yield benefits. Studies show correlations with reduced emissions in host regions through technology transfers and efficient practices. In the European Union, mature financial systems amplify these impacts, improving institutional quality and reducing costs. As global challenges like climate change and supply chain disruptions grow, such partnerships become critical.