China’s Outbound Investment Revolution: Legal Service Opportunities in the $162.8 Billion ODI Market for International Law Firms

Executive Summary

China’s outbound direct investment (ODI) market is undergoing a significant transformation, presenting substantial opportunities for international law firms, particularly those with representative offices in China. With China’s ODI reaching US$162.78 billion in 2024 and projected to continue its strategic global expansion, the demand for sophisticated legal services to navigate complex international regulations, M&A, and project finance is escalating. The Chinese legal services market itself is a robust and growing sector, valued at $97.8 billion in 2024 and forecast to reach $133.0 billion by 2030, exhibiting a healthy 5.1% CAGR. Corporate legal services, accounting for 42.23% market share, are the fastest-growing segment, directly benefiting from the surge in outbound investment activities. This article provides a comprehensive analysis of this dynamic market, highlighting strategic opportunities, competitive dynamics, and actionable recommendations for international law firms aiming to capitalize on China’s outbound investment revolution.

Detailed Market Analysis

China’s outbound investment landscape is characterized by both impressive scale and strategic evolution, reflecting a deliberate shift towards higher-quality, more sustainable, and technologically advanced global engagement. In 2024, China’s total outbound direct investment (ODI) reached a remarkable US$162.78 billion, marking a substantial 10.1% increase in dollar terms year-on-year. This growth was underpinned by non-financial direct investments totaling US$143.85 billion, which also saw a robust 10.5% increase [1]. These figures demonstrate China’s unwavering commitment to global economic integration and diversification, even amidst a complex international economic environment.

The sheer breadth of China’s global reach is evident in the fact that Chinese investors established non-financial direct investments in over 9,400 overseas enterprises across 151 countries and regions in 2024 [1]. This extensive network of investments creates a continuous and escalating demand for sophisticated legal services, ranging from initial market entry and regulatory compliance to complex transactional support and dispute resolution.

While the first eight months of 2025 witnessed a slight year-on-year decline of 1.7% in China’s total ODI, amounting to US$109.15 billion, it is crucial to note the resilience and strategic reorientation within non-financial ODI, which grew by 3% to US$96.9 billion during the same period [1]. This divergence signals a strategic shift towards a “real economy tilt,” emphasizing investments in sectors critical for China’s long-term development and global competitiveness. These include advanced manufacturing, digital technology, and green industries, which are increasingly becoming focal points for Chinese outbound capital [1]. This shift implies a greater need for legal expertise in areas such as technology transfer, intellectual property protection, environmental regulations, and specialized industry-specific compliance.

Furthermore, the increasing participation of small and medium-sized enterprises (SMEs) in overseas expansion is a notable trend. The number of Chinese enterprises investing abroad grew steadily from 2,799 in January–February 2025 to 8,350 by January–August, approaching the 9,400 total recorded for full-year 2024 [1]. This indicates a broader base of companies pursuing overseas opportunities through smaller, more diversified projects. For international law firms, this translates into a wider client base and a demand for scalable, flexible legal solutions that cater to the specific needs of SMEs, which may differ significantly from those of large state-owned enterprises.

The Belt and Road Initiative (BRI) remains a cornerstone of China’s outbound investment strategy and a powerful engine for legal service demand. By the end of 2024, Chinese enterprises had invested a cumulative US$289.6 billion in BRI countries, with US$38.7 billion in flows during 2024 alone, marking a substantial 12.5% increase year-on-year [2]. This ambitious initiative, spanning over 150 countries, generates immense and continuous demand for legal services across a spectrum of areas. These include, but are not limited to, infrastructure development, project finance, cross-border transactions, international trade law, investment protection, and complex dispute resolution. The sheer volume and geographical spread of BRI projects necessitate legal counsel with deep understanding of diverse legal systems and international best practices. The growing presence of 207 Chinese law firm overseas offices is a direct testament to the legal sector’s proactive response to this global expansion, often seeking partnerships with international firms to enhance their global service capabilities.

Simultaneously, the China legal services market itself is experiencing robust and sustained growth, presenting a dual opportunity for international law firms. Valued at a substantial $97.8 billion in 2024, it is projected to reach an impressive $133.0 billion by 2030, demonstrating a healthy compound annual growth rate (CAGR) of 5.1% from 2025 to 2030 [3]. This growth is driven by increasing economic activity, regulatory reforms, and a growing awareness among Chinese businesses and individuals of the importance of legal counsel. Within this burgeoning market, corporate legal services stand out as the fastest-growing segment, holding a significant 42.23% market share in 2024 [3]. This segment’s rapid expansion is directly correlated with the increasing complexity and volume of both domestic and outbound business activities. This includes a wide array of legal needs such as mergers and acquisitions, corporate governance, regulatory compliance, intellectual property protection, and international trade law, all of which are directly impacted by China’s outbound investment revolution.

Competitive Landscape Assessment

The competitive landscape for legal services in China, particularly in the context of outbound investment, is characterized by a fascinating interplay between established international law firms and rapidly ascending domestic Chinese firms. Historically, international law firms enjoyed a distinct advantage in cross-border transactions, primarily due to their extensive global networks, deep experience with diverse international legal frameworks, and multilingual capabilities. These firms were often the first port of call for complex ODI deals, offering a perceived gold standard in international legal counsel.

However, this dynamic has been significantly reshaped by the remarkable growth and internationalization of Chinese law firms. The number of Chinese law firms with overseas offices has witnessed a staggering 70% increase since 2018 [4]. This aggressive expansion reflects a strategic imperative to follow their domestic clients abroad and provide seamless legal support for their international ventures. Firms like King & Wood Mallesons, JunHe, and Fangda Partners have not only grown in size but have also developed sophisticated practices capable of handling complex international matters, often rivaling their global counterparts.

This evolving landscape has intensified competition, yet it has also fostered an environment ripe for collaboration. Chinese law firms possess invaluable assets: an intimate understanding of the local regulatory environment, strong government relationships, and a nuanced grasp of the cultural and business practices of Chinese enterprises. Their ability to navigate the intricacies of the domestic legal system and maintain close ties with Chinese clients makes them indispensable partners for many outbound projects. Conversely, international law firms bring to the table unparalleled expertise in specific international legal structures, such as international tax planning, sophisticated financing arrangements, complex dispute resolution mechanisms, and compliance with a multitude of diverse regulatory regimes across various jurisdictions.

Consequently, the market is increasingly witnessing a blend of these complementary strengths. Chinese and international firms frequently engage in strategic partnerships, joint ventures, or co-counsel arrangements on large-scale ODI projects, particularly those under the Belt and Road Initiative. These collaborations allow for the pooling of resources and expertise, providing Chinese outbound investors with comprehensive legal solutions that combine local insights with global best practices. For international law firms, the competitive advantage now lies not just in their global reach, but also in their ability to effectively integrate with local partners, offer specialized, high-value services, and adapt to the unique demands of Chinese multinational corporations. This necessitates a strategic focus on building strong relationships, understanding the evolving needs of Chinese clients, and demonstrating tangible value in navigating the complexities of global expansion.

Strategic Opportunities Identification

The revolution in China’s outbound investment presents a rich tapestry of strategic opportunities for international law firms, each demanding specialized expertise and a nuanced understanding of global and local legal frameworks. These opportunities are not merely transactional but encompass the entire lifecycle of an investment, from inception to operation and potential dispute resolution.

1. Mergers & Acquisitions (M&A) and Corporate Restructuring: As Chinese enterprises aggressively pursue global expansion, cross-border M&A activities are at an all-time high. These transactions are inherently complex, involving intricate due diligence across multiple jurisdictions, navigating diverse regulatory approvals (including antitrust and foreign investment reviews), and managing post-acquisition integration challenges. International law firms with robust M&A practices, deep sector-specific knowledge, and a global footprint are exceptionally well-positioned to advise on these high-value deals. This includes structuring transactions, negotiating agreements, and ensuring compliance with international corporate governance standards.
2. Project Finance and Infrastructure Development: The Belt and Road Initiative (BRI) continues to be a monumental driver of infrastructure and energy projects across Asia, Africa, and Europe. These mega-projects necessitate sophisticated project finance legal services, covering everything from structuring complex financing arrangements (e.g., syndicated loans, export credits, multilateral financing) to meticulous risk allocation, drafting and negotiating engineering, procurement, and construction (EPC) contracts, and ensuring compliance with local and international environmental and social standards. International firms with proven experience in infrastructure and project finance, particularly in emerging markets, can play an indispensable role in facilitating these ventures.
3. Compliance and Regulatory Advisory: The global regulatory landscape is becoming increasingly stringent and fragmented. Chinese companies operating internationally face a formidable array of compliance challenges, including anti-corruption laws (such as the U.S. Foreign Corrupt Practices Act (FCPA) and the UK Bribery Act), international sanctions regimes, export controls, data privacy regulations (e.g., GDPR, CCPA), and evolving environmental protection laws. International law firms are crucial in providing proactive advisory services, helping Chinese companies establish robust internal compliance programs, conduct thorough internal investigations, and navigate complex regulatory enforcement actions. This area is particularly critical as Chinese firms seek to mitigate legal and reputational risks in foreign markets.
4. International Dispute Resolution: The inevitable consequence of increased cross-border investment is a rise in international disputes. International arbitration and litigation have become the preferred mechanisms for resolving these conflicts, offering neutrality and enforceability. Firms with strong international arbitration and litigation teams, particularly those with extensive experience in investor-state dispute settlement (ISDS) and commercial arbitration under various institutional rules (e.g., ICC, SIAC, HKIAC, LCIA), will find significant opportunities. Expertise in cross-border enforcement of judgments and arbitral awards is also highly valued.
5. Intellectual Property (IP) Protection and Management: As Chinese companies ascend the value chain and expand their technological footprint globally, the strategic protection and management of intellectual property become paramount. International law firms can provide comprehensive services, including developing global IP strategies, assisting with patent, trademark, and copyright registration across multiple jurisdictions, negotiating IP licensing agreements, and aggressively pursuing enforcement actions to safeguard Chinese enterprises’ innovations and brands in foreign markets. This is particularly relevant in high-tech sectors and industries prone to IP infringement.
6. Environmental, Social, and Governance (ESG) Advisory: Global investors and regulators are placing unprecedented emphasis on sustainable and responsible business practices. Chinese outbound investors are increasingly facing pressure to adhere to international ESG standards, not only for regulatory compliance but also for access to capital and maintaining a positive corporate image. International law firms can offer critical advisory services on ESG due diligence, developing and implementing ESG policies, reporting frameworks, and ensuring compliance with evolving sustainability regulations. This helps Chinese companies mitigate environmental and social risks, enhance their reputation, and attract responsible investment.
7. Employment and Labor Law: As Chinese companies establish operations and hire local workforces in foreign countries, they encounter diverse and often complex employment and labor laws. International law firms can provide essential guidance on local hiring practices, employment contracts, labor relations, immigration, compensation and benefits, and termination procedures, ensuring compliance and mitigating potential labor disputes.

Implementation Recommendations

To effectively capture these opportunities, international law firms should consider the following implementation recommendations:

1. Strengthen Local Presence and Expertise: While global reach is crucial, a strong local presence in China, through representative offices, is essential for building relationships with Chinese clients and understanding their specific needs. Investing in local talent and developing Mandarin-speaking legal professionals who understand both Chinese and international legal systems will be a significant advantage.
2. Develop Niche Specializations: Given the broad nature of China’s ODI, firms should identify and develop niche specializations that align with key outbound investment sectors, such as renewable energy, digital infrastructure, advanced manufacturing, or specific BRI corridors. This allows for targeted marketing and the development of deep expertise.
3. Foster Strategic Alliances with Chinese Law Firms: Collaborating with reputable Chinese law firms can provide a synergistic approach. Chinese firms offer local market access and relationships, while international firms bring global expertise. These alliances can be particularly effective for large, multi-jurisdictional projects.
4. Invest in Technology and Data Analytics: Leveraging legal technology, including AI-powered due diligence tools, contract review platforms, and data analytics for compliance monitoring, can enhance efficiency, reduce costs, and provide superior service to clients engaged in complex cross-border transactions.
5. Proactive Client Engagement and Thought Leadership: International law firms should proactively engage with Chinese state-owned enterprises (SOEs) and private companies involved in outbound investment. Publishing thought leadership pieces, hosting seminars, and participating in industry conferences focused on ODI trends and legal challenges can establish firms as trusted advisors.
6. Tailor Service Offerings: Recognize that Chinese clients may have different expectations and priorities compared to Western clients. Tailoring service offerings, communication styles, and fee structures to meet these specific needs can foster stronger client relationships and repeat business.

Future Outlook and Projections

The future outlook for China’s outbound investment and the corresponding legal services market remains overwhelmingly positive, albeit with evolving dynamics and a heightened emphasis on strategic resilience. While the overall growth rate of ODI may experience some fluctuations due to global economic conditions, rising geopolitical tensions, and increased scrutiny over overseas transactions, the fundamental strategic imperative for Chinese enterprises to “go global” remains robust and deeply ingrained in national economic policy. The discernible shift towards high-tech, green energy, and digital infrastructure sectors, coupled with a continued and intensified focus on Belt and Road Initiative (BRI) markets, suggests a more qualitative, sustainable, and strategically aligned growth trajectory for Chinese ODI [2]. This evolution implies a sustained demand for legal services that can navigate complex regulatory frameworks, facilitate technology transfers, and ensure compliance with international environmental and social governance (ESG) standards.

The Chinese legal services market is projected to continue its impressive expansion, driven by several reinforcing factors. These include increasing domestic and international regulatory complexity, the burgeoning need for highly specialized legal advice in emerging and high-growth sectors (such as AI, biotechnology, and advanced manufacturing), and the ongoing, irreversible internationalization of Chinese businesses. The demand for corporate legal services, in particular, is expected to remain exceptionally robust, fueled by the continuous stream of cross-border M&A activities, the imperative for comprehensive compliance frameworks, and the inevitable rise in dispute resolution needs arising from the sheer volume and complexity of ODI activities. International law firms that can demonstrate agility, foresight, and a deep understanding of these evolving client needs will be best positioned to capture significant market share.

International law firms that proactively adapt to these evolving trends, deepen their understanding of Chinese client needs, and strategically position themselves in key outbound investment corridors will not only survive but thrive. The emphasis will increasingly be on providing value-added services that transcend traditional legal advice, encompassing strategic counsel, proactive risk management, and innovative, commercially astute solutions for complex international ventures. This includes advising on market entry strategies, navigating foreign investment review processes, and developing robust compliance programs tailored to specific industries and jurisdictions.

Conclusion with Actionable Insights

China’s outbound investment revolution represents an unparalleled and enduring opportunity for international law firms. The sheer scale and strategic evolution of China’s ODI, coupled with the rapid and sustained growth of its domestic legal services market, create a fertile ground for expansion, specialization, and long-term partnership. To succeed and establish a lasting presence in this dynamic ecosystem, international law firms must adopt a multi-faceted and forward-looking strategy:

• Prioritize a client-centric approach: Cultivate a profound understanding of the unique cultural nuances, business objectives, and risk appetites of Chinese enterprises. This involves offering bespoke, culturally sensitive legal solutions and fostering long-term, trust-based relationships built on mutual respect and effective communication.
• Invest in specialized expertise: Continuously develop and deepen capabilities in areas critically important to ODI, such as cross-border M&A, sophisticated project finance, international regulatory compliance, and complex dispute resolution. Special attention should be paid to high-growth sectors like green energy, digital infrastructure, and advanced technology, where Chinese investment is concentrated.
• Embrace collaboration: Actively seek and form strategic alliances and partnerships with leading Chinese law firms. This collaborative approach allows international firms to leverage invaluable local insights, navigate domestic regulatory landscapes more effectively, and expand their service delivery capabilities, particularly for large-scale, multi-jurisdictional projects under the BRI.
• Leverage technology and innovation: Invest in and utilize cutting-edge legal technology solutions, including AI-powered due diligence platforms, advanced contract management systems, and data analytics tools for compliance monitoring. These technologies enhance efficiency, manage complex data volumes, and enable the provision of more cost-effective and value-driven services.
• Maintain a positive and proactive stance: Despite potential geopolitical headwinds and evolving global trade dynamics, the underlying drivers for China’s ODI are fundamentally strong and enduring. Firms should maintain a positive, opportunity-focused outlook and proactively engage with Chinese investors, offering strategic guidance and demonstrating their capacity to facilitate successful global ventures.

By strategically aligning their services with the trajectory of China’s outbound investment revolution, international law firms can secure a significant and sustainable share of the burgeoning $162.8 billion ODI market. This strategic alignment will not only contribute to their own growth and global prominence but also play a crucial role in supporting China’s continued, high-quality integration into the global economy.

References

[1] China Outbound Direct Investment (ODI) Tracker: 2024-25. (2025, August 29). China Briefing. https://www.china-briefing.com/news/china-outbound-direct-invest-odi-tracker-2024-25/

[2] Mapping China’s ODI Shifts: Sources, Destinations, and Sectors. (2025, September 16). China Briefing. https://www.china-briefing.com/news/mapping-chinas-outbound-investment-odi-shifts-sources-destinations-and-sectors/

[3] China Legal Services Market Size & Outlook, 2024-2030. Grand View Research. https://www.grandviewresearch.com/horizon/outlook/legal-services-market/china

[4] Chinese law firms in ‘pivotal moment’ as they answer the call to go global. (2025, July 12). South China Morning Post. https://www.scmp.com/news/china/politics/article/3317864/chinese-law-firms-pivotal-moment-they-answer-call-go-global
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