Autos and Materials Strong, Real Estate Rebounds: Q3 2026 Update

Chinese companies announced 143 FDI transactions in Q3 worth $23.1 billion, a 36% drop compared to previous two quarters. M&A activity remained sluggish with greenfield accounting for 76% of announced investment. Autos and materials remained the key drivers of new investment activity. New investments in overseas real estate projects surged to a 9-year high.

Investment momentum

New data from Rhodium Group’s China Cross-Border Monitor (CBM) shows Chinese companies announced 143 major FDI transactions in Q3 2026, totaling an estimated $23.1 billion.

New greenfield investment totaled $17.5 billion, a 30% fall from the previous quarter. The largest transaction was an estimated $1.8 billion Hong Kong ​Northern Metropolis development project by HSK New Development, a joint venture involving five Chinese real estate developers.

New M&A transactions dropped to $5.6 billion, the lowest quarterly level since Q2 2024. The only billion-dollar-level transaction was Gotion’s acquisition of a 49% stake in Volkswagen’s battery plant in Valencia, Spain, for $1.25 billion. Once completed, Gotion will have seven battery plants in Europe and North Africa combined.

The third quarter saw several notable transaction status updates. Following initial discussions, Guoyou Materials Group rolled out details to invest $1 billion to build a logistics hub and terminal at Kazakhstan’s Port of Kuryk. A CCCC-CR20 consortium broke ground on the Salvador-Itaparica bridge in Brazil for an estimated $989 million. In the automotive supply chain, Great Wall Motor began expanding its automatic transmission plant in Russia for an estimated $125 million, while Capchem broke ground on a $75 million lithium battery electrolyte production base in Ohio, United States. CATL’s $7.6 billion battery plant in Hungary was temporarily suspended due to worker exposure to nickel, but has since begun trial production. Chery closed its takeover of Nissan’s car manufacturing plant in Rosslyn, South Africa for an estimated $80 million. Likewise, BYD began operations at its $1 billion EV assembly factory in Indonesia, the company’s third in Southeast Asia. In the United States, Cirrus Aircraft, owned by state-owned AVIC, completed a $13 million expansion of its composite parts plant in Grand Forks, North Dakota, while Lenovo completed a $77 million expansion of its server manufacturing and fulfillment facility in Whitsett, North Carolina. Agibot launched its estimated $11.5 million humanoid robot manufacturing facility in Serbia.

Multiple troubled Chinese investments were identified in the third quarter, most of them related to regulatory interventions. Unable to secure approval from Chinese authorities, Zijin’s $4 billion acquisition of Allied Gold was terminated and replaced by the purchase of a smaller 9.2% stake for $295 million. Sinochem downsized its stake in Italian tiremaker Pirelli to 20.1%, becoming the second-largest stakeholder after a prolonged dispute with the Italian government and investors. The German government blocked the sale of an 80% stake in logistics firm Zippel to state-owned Cosco for an estimated $32 million over security concerns. FTDI Holdings completed the forced divestment, ordered by the UK government in Nov 2024 under the NSI Act, of the 80.2% stake in UK chipmaker FTDI it had acquired for $414 million in Dec 2021. To comply with the One Big Beautiful Bill Act, Cnano Technology, a carbon nanotube materials supplier, will sell a controlling stake in a subsidiary running its US unit. Chixia Laos suspended its Mengkang rare earth project in Laos estimated at $25 million, to comply with rare earth policy requirements. Outside of regulatory action, Sinopec’s estimated $4 billion Amur Gas Chemical complex in Russia experienced a major fire that killed 15 workers; and Metallurgical Corporation of China, which operates the Saindak copper-gold project in Balochistan, Pakistan, warned that insurgent violence in the province may force it to suspend operations.

Investment by sector

The top sectors for Chinese outbound investment in Q3 2026 were real estate, automotive, and basic materials (Figure 2).

The real estate sector ranked first with $5.1 billion in new investment, the highest quarterly level in 9 years. The largest transaction was HSK New Development’s $1.8 billion Hong Kong Northern Metropolis Mega Project. Sentuo Group announced and broke ground on a $1.3 billion Airport Garden City project, an integrated real estate complex in Accra, Ghana. Kingsford acquired the Tan Boon Liat building in Singapore for $737 million, with plans to redevelop it for residential use.

The automotive sector came in second place with $5.1 billion of new Chinese investment. Gotion alone made up the top two transactions, both of which were in Spain, including the acquisition of Volkswagen’s battery plant for $1.25 billion and a new battery cathode and recycling plant in Valladolid for an estimated $928 million. Volkswagen will also invest in two of Gotion’s sites as the two companies co-develop a European battery supply chain. Additionally, Zenith Steel Group is investing $300 million for a tire components plant at the Ain Sokhna Industrial Zone of Egypt.

The basic materials, metals, and minerals sector fell to third place with $4.5 billion of new investment, the lowest quarterly level since Q1 2023. Huaxin Cement agreed to buy Holcim’s Philippines unit, its fourth Holcim acquisition, taking 67.6% for $527 million and the rest within five years. Zijin-owned Liex will invest $709 million to expand its Tres Quebradas asset in Argentina, including building a second lithium carbonate plant. Similarly, Sinomine announced plans to invest $500 million to build a lithium sulfate refinery at its Bikita minerals project in Zimbabwe.

Investment by geography

Asia was the top destination for Chinese capital in Q3 2026, followed by Africa and Europe (Figure 3).

With $9.0 billion in investment, around the same as the previous quarter, Asia remained the leading destination for Chinese investment in Q3. HSK New Development led with its $1.8 billion Hong Kong Northern Metropolis Mega Project, followed by Guoyou Materials Group’s $1 billion Port of Kuryk logistics hub and terminal in Kazakhstan. The purchase of Holcim Philippines by Huaxin Cement for $527 million also contributed to the region’s tally.

Supported by transactions in real estate and infrastructure, Africa ranked second with $5.4 billion in investment, 8% above the four-quarter average of $5.0 billion. While the region continues to attract large commitments, several of the very large projects announced in previous years have been slow to materialize. The top transaction in the region was the $1.3 billion Sentuo Airport Garden City project in Ghana. Huatong Angola Industry and Berkshire Waterhouse Infrastructure Development won a 25-year concession to develop Angola’s Barra do Dande Integrated Development Free Zone with a port terminal and supporting infrastructure for $900 million. Mota-Engil Africa, minority-owned by CCCC, will build and run a railway at the Lobito Corridor, Democratic Republic of Congo, for an estimated $583 million.

Europe came third, attracting $3.5 billion in investment, about 70% of which was dedicated to the automotive sector in Spain. Gotion dominated investment there with the acquisition of Volkswagen’s battery plant in Valencia for $1.25 billion and the new construction of a battery cathode and recycling plant in Valladolid for an estimated $928 million. Finally, Geely acquired a 34% stake in Ford’s automotive factory in Almusafes for $252 million.