Report: Dwindling investments become more concentrated - Chinese FDI in Europe (2023 Update)
In 2023, Hungary received 44 percent of all Chinese foreign direct investment (FDI) in Europe, overtaking the “Big Three” economies Germany, France and the UK as the main recipient. Overall, Chinese FDI in the region slipped further to EUR 6.8 billion and reached the lowest level since 2010.
These are some of the key findings of MERICS’ new joint report with Rhodium Group on the latest trends in Chinese investment in the European Union and United Kingdom.
According to the authors Agatha Kratz, Max J. Zenglein, Alexander Brown, Gregor Sebastian and Armand Meyer, it was an uptick in greenfield investment in the electric vehicle (EV) industry that kept Chinese investment levels in Europe from falling off a cliff in 2023. Greenfield investment shot up to 78 percent of the total to become the dominant form of Chinese FDI in Europe.
The authors expect that the drop in Chinese investment in Europe will continue to be cushioned by ongoing investment in the EV sector. But a substantial uptick is not expected. Instead, investment is likely to remain at low levels due to the weak financial positions of Chinese firms and increased government oversight in Europe. Chinese firms must also weigh up market opportunities in Europe against the backdrop of growing EU-China trade tensions.
