The number of projects into China fell sharply, decreasing by 54% from 2019. During the same period, the number of greenfield FDI projects into the US also fell, but by a smaller proportion (11%).
Chinese outbound FDI into the US
China-based companies created 68 projects in the US in 2020. This represented a 6.3% increase compared with 2019.
Nominally, China-based companies primarily invested in software and IT services, industrial machinery, equipment and tools, and rubber sectors in the US. Combined, these three sectors accounted for 47% of total Chinese outbound FDI projects destined for the US in 2020.
In terms of total Chinese outbound FDI projects, the US ranked as the second-largest recipient country in 2020. It was the leading recipient in 2019.
China-based companies primarily established operations in California. In fact, 24% of projects into the US by Chinese companies were located there in 2020. Texas and South Carolina were the next most popular subnational destinations.
US outbound FDI into China
US-based companies created 97 projects in China in 2020. The number of projects fell by 53.4% compared with 2019.
Tourism, pharmaceuticals and food were the top sectors in which US companies were investing in China. Combined, these three sectors accounted for 45% of total US outbound FDI projects destined for China in 2020.
In terms of sector market share, China attracted a larger market share of US outbound FDI in construction materials. China accounted for 20% of total US construction materials outbound FDI projects. China also accounted for significant shares in the pharmaceuticals (15%) and beverages (15%) sectors.
Top US-based investors in China included Hilton, Marriott International and Hyatt Hotels. Combined, these companies accounted for 19% of the total number of US-headquartered projects established in China in 2019–20.
China ranked as the eighth-largest recipient country of US outbound FDI in 2020. It was the fourth-largest recipient in 2019.
US-based companies primarily established operations in Shanghai province. In 2020, 24% of all US outbound projects destined for China were created in Shanghai province. Jiangsu and Guangdong were the next most popular subnational destinations.