Chinese investment in Europe falls to decade low, as focus turns to EV industry
Car miniature, "Electric vechicles (EVs)" words, EU and Chinese flags are seen in this illustration taken, September 26, 2023. REUTERS/Dado Ruvic/Illustration/File photo
A Bloomberg report says that Chinese investment in Europe plummeted to its lowest level in over a decade last year, with the bulk of new capital funneled into their own electric vehicle (EV) sector.
Chinese firms invested 6.8 billion euros ($7.4 billion) in 27 European Union countries and the U.K. in 2023, marking the lowest figure since 2010, according to a report by Rhodium Group and the Mercator Institute for China Studies in Germany.
‘Nearly 70% of this investment was directed towards EV-related industries’
Nearly 70% of this investment was directed towards EV-related industries, such as battery manufacturing. This decline in European investment contrasts with China’s robust global investment activity, which reached its highest level since 2016, highlighting the increasingly strained relationship between Europe and China. The tension is expected to escalate as the E.U. plans to impose tariffs on Chinese EV exports, a move that could trigger retaliatory measures from Beijing.
Hungary emerged as a major recipient
Hungary emerged as a major recipient, attracting 3 billion euros of new Chinese investment in 2023, accounting for 44% of the total investment in Europe. Significant projects include an $8.7 billion battery factory by Contemporary Amperex Technology Co. and a cathode factory by Zhejiang Huayou Cobalt Co., announced last June.
During Chinese President Xi Jinping’s visit to Hungary, several new deals were announced, indicating a sustained focus on Hungary and the EV sector. The Rhodium report also highlighted multiple new battery projects by Chinese investors across Europe, suggesting this trend will continue.
European Commission says that China’s share of EVs sold in Europe has risen to 8% and could reach 15% in 2025.
