Report Shows China’s Investment in Europe Hits 10-Year Low

An annual report published on June 6 by Rhodium Group and the Mercator Institute for China Studies revealed that China’s investment in Europe in 2023 dropped to its lowest level in 13 years since 2010. The direct investment was only 6.8 billion euros ($7.35 billion), indicating a decrease from the previous year, setting a new low since 2010.

The report indicates that China’s direct investment in Europe peaked at 47.5 billion euros ($51.3 billion) in 2016 and has been declining ever since. Before the COVID-19 pandemic in 2019, the investment reached 14.2 billion euros ($15.34 billion) but fell to 6.8 billion euros ($7.35 billion) in 2023, less than 15 percent of the peak.

Furthermore, Hungary emerged as the top destination for Chinese Foreign Direct Investment (FDI) in Europe, with 44 percent of the total investment in 2023 going to Hungary. This surge was mainly driven by investments in EV battery plants, totaling 8.7 billion euros ($9.4 billion).

Hungary Is Top Chinese FDI Destination in Europe

China’s EV giant BYD announced plans to establish an EV factory in Hungary in 2026. Hungary attracted more Chinese FDI in 2023 than France, Germany, and the UK combined.

Due to financial constraints, China is strategically concentrating its investments in countries considered more favorable,” according to experts.

Geopolitical Factors

Geopolitical security concerns have also contributed to the decline in China’s investment in Europe. Europe and the United States have tightened national security reviews of foreign investments, impacting China’s investment in the region since May 2021.

Mr. Chung highlighted the EU’s concerns regarding China’s support for Russia following its invasion of Ukraine in 2022. This has led to a shift in Europe’s stance towards China and may result in further declines in trade and investment between the two regions.

Luo Ya and Li Su contributed to this report.