China’s investment in Europe fell sharply last year. According to a study by the American research firm Rhodium Group and the German Mercator Institute for China Studies, direct investment from China in the European Union and the United Kingdom decreased by 45 percent compared to 2019 to 6.5 billion euros.
This puts Chinese investment in European companies and projects at the lowest level in ten years.
According to the study, the decline is related to the corona crisis, the Chinese government’s stricter rules on foreign capital flows and regulatory obstacles in Europe when it comes to investments from countries outside the EU. Due to these regulations, several takeovers by Chinese parties did not go through.
Germany is the most important European country for Chinese investment, followed by France and the United Kingdom. The researchers believe that rising tensions between the EU and China over trade could create additional headwinds for Chinese investment in Europe.