1.THESURPRISINGRESILIENCEOFASIA'SFDIUNDERTRUMP2.O 1.2 Chinese MNEs kept expanding abroad while others retrenched Outbound FDl declined across major world regions. Outbound FDl from Asia also temporarily pulled back their expansion plans, including those from North America (-42.6%), Middle East (-37.2%), and Europe (-17.8%). China's outbound FDl bucked the trend by growing 1.9% year-on-year in April-September 2025. On the surface, this comes as a surprise as "Liberation products and frms. New compliance requirements were introduced to prevent Chinese frms from routing goods through third countries (e.g. Vietnam or Mexico) to bypass US tariffs. These rules placed Chinese-linked supply chains under intense scrutiny. Domestically, China's economy is struggling with weak industrial profits and persistent deflationary pressures. Historically, such conditions would have capital overseas. Yet China's outbound investments defied these forces and gained momentum immediately after the onset of the tariff war.