China is little and little curious in Europe – investment is inactive falling

chiny24.com 11 months ago

Rhodium Group (USA) and MERICS (Germany), 2 recognised think-tanks dealing with China's issues, published a study summarizing Chinese investments in 2023 in Europe defined as the European Union + the United Kingdom. Key conclusions are:

The level of Chinese investment in Europe has been decreasing since 2016, erstwhile it reached its highest level in past (EUR 47.5 billion, around PLN 204.9 billion). Last year they decreased to the lowest level since 2010, i.e. to EUR 6.8 billion (about PLN 29.33 billion). The year before that was EUR 7.1 billion (about PLN 30.63 billion).
The value of mergers and acquisitions (M&A) decreased by 58 percent to just EUR 1.5 billion (about PLN 6.47 billion). China's economical difficulties, tight capital control, together with increased abroad investment control in Europe, contributed to their decline.
The share of greenfield investments increased to 78% in 2023, which means a further increase from 51% in 2022. The most crucial projects of this kind last year came from private companies:

- - NingDe ShiDai fresh Energy Technology Co., Ltd. (chin. 宁德时代新能源科技股份有限公司) known as CATL (Contemporary Amperex Technology Co., Ltd. – CATL),
  - YuanJing Power Battery Technology Co., Ltd. (AESC, chin. ), and
  - Zhejiang HuaYou Cobalt manufacture Co., Ltd. (chin. 浙江华友钴业股份有限公司),

which have invested in battery factories in Hungary, Germany and France.

Investments related to electrical vehicles put Hungary as the best destination for investments from the mediate East. In 2023, Hungary received 44% of all Chinese abroad direct investment in Europe, benefiting in peculiar from increased investment in electrical vehicles (EV). More than 2 thirds (69%) of Chinese abroad investments were made in 2023 in the EV sector. In 2022 it was 41%. These investments are increasingly driven up and down the value chain of electrical vehicles. Chinese components suppliers for battery production announced 2 greenfield projects worth over a billion euros each to start in 2024. Additionally, BYD corp Limited (chin. 比亚迪股份有限公司) announced plans to manufacture electrical vehicles in Hungary since 2026.

The interest of Chinese investors remains in the European healthcare sectors, consumer products and information and communication technologies. They attracted an average of EUR 3 billion (about PLN 12.94 billion) of Chinese investment annually from 2021 to 1923. Medical devices are a key area of interest, representing 2 thirds of investment in the healthcare sector from 2021 to 1923.
Experts from Rhodium and MERICS point out that the geographical and sectoral scope of investment monitoring systems in Europe is constantly expanding. Chinese companies wishing to invest in strategical sectors in Europe must so anticipate greater regulatory control. According to the authors of the report, no crucial revival of Chinese investment in Europe is expected. Although their decline will proceed to be mitigated by ongoing investments in the electrical vehicle sector. However, they do not anticipate crucial growth. Instead, investments are likely to stay low due to the weak financial position of Chinese companies and increased supervision by various European government agencies. There are besides expanding trade tensions between the EU and China.