Chinese Investment Rebounds Despite Growing Frictions: Chinese FDI in Europe in 2024

Key findings

• Investment rebounds for the first time since 2016: Chinese foreign direct investment (FDI) in the EU and UK reached €10 billion in 2024, rising 47% from the previous year. Europe remained the leading destination for Chinese investment in high-income economies, drawing 53.2% of all Chinese FDI in such markets. In 2024, the EU and UK’s share of total Chinese FDI also rose to 19.1%, the first significant increase since 2018.
• The recovery is fueled by record greenfield investments and stronger M&A: Greenfield investment grew for the third consecutive year, rising by 21% year-on-year and hitting a record high of €5.9 billion. It remained the dominant form of Chinese investment in Europe, but an improvement in M&A, which jumped 114% year-on-year to €4.1 billion, also contributed to lift overall investment levels.
• Germany, France, and the UK lose ground as Hungary again takes the top spot: The combined share of the “Big Three”—the United Kingdom, Germany, and France—dropped to just 20%, sharply down from the 2019–2023 average of 52%. The decrease reflects both shifting investment patterns and a significant fall in overall investment. In contrast, Hungary—buoyed by capital-intensive greenfield projects—accounted for 31% of all Chinese FDI in Europe, the highest share of any country.
• China’s investment footprint in Europe remains limited: New Chinese greenfield EV investments in Europe have drawn attention, but the total stock of China’s EV FDI remains negligible compared to overall FDI stock in Europe, Europe’s FDI stock in China, and the scale of the EU-China trading relationship. While China is emerging as a lead investor in certain countries like Hungary, EU, US and South Korean partners are still ahead.
• A further increase is possible in 2025, but slowing EV FDI momentum puts the longer-term outlook for Chinese investment into question. A few large M&A transactions in 2025 could lead to another rebound, and greenfield FDI will hold steady with two EV battery plants confirmed to break ground in 2025. However, a sharp drop in the value of newly announced Chinese EV projects in 2024, as well as the cancellation of three major EV battery projects last year, raise questions about whether the increase in Chinese FDI in Europe can be sustained, with no other sector poised to offset a possible decline in EV investment.