A New Record Year for Chinese Outbound Investment in EuropeThilo Hanemann and Mikko Huotari | February 16, 2016
A new report by Rhodium Group in partnership with the Mercator Institute for China Studies (MERICS).
Chinese investment in Europe has grown exponentially in recent years, as discussed in our in-depth special report (“Chinese FDI in Europe and Germany – Preparing for a New Era of Chinese Capital”) released last year. This note provides an update on Chinese investment patterns in Europe in 2015. We find that Chinese outbound foreign direct investment (OFDI) hit a new record high of EUR 20 billion last year, illustrating China’s potential to become an important source of capital for Europe. At the same time, the competition among EU states for Chinese capital has intensified, which already weakens European leverage vis-à-vis China on important strategic questions. Moreover, investment patterns in 2015 further aggravate existing economic concerns related to Chinese investment, most importantly the lack of equal market access for European companies in China and potential market distortions through state-owned and state- supported enterprises. Addressing those concerns now is critical as China expects to deploy an additional USD 1 trillion in outward FDI in the coming five years in Europe and globally.