Data compiled by the Mercator Institute for China Studies (Merics) and the Rhodium Group show that Chinese companies injected €10 billion of new capital into Europe during 2024, reversing a seven-year downturn. Yet, despite the rebound, these investments accounted for just 20 percent of the 2016 high-water mark and were heavily concentrated in a handful of major players, notably battery-maker CATL, electric-vehicle producer BYD, tech giant Tencent and automaker Geely.
Beijing’s firms have shifted strategy in the face of increasing political scrutiny and trade tensions, moving away from high-profile mergers and acquisitions toward greenfield developments. In Hungary alone, CATL broke ground on a €7.5 billion battery gigafactory in Debrecen, while BYD is planning a €5 billion EV plant near Szeged. Those two projects together accounted for almost a third of all Chinese capital flows into Europe last year.
Hungary’s prime minister, Viktor Orbán, has welcomed Chinese investment as a counterbalance to sluggish domestic growth and as a political signal of his country’s close ties to Beijing. By contrast, traditional destinations such as the UK, Germany and France saw their combined share of Chinese FDI fall from an average of 52 percent over 2018–23 to just 20 percent in 2024.
Chinese carmakers have been pressed to expand overseas amid chronic overcapacity and slowing home demand, and the EU’s 45 percent tariff on Chinese auto imports introduced last October has only intensified the incentive to localize production. Yet, despite headline-grabbing projects, overall announced investments by Chinese EV firms tumbled 79 percent year-on-year, as Svolt abandoned plans for two €4.2 billion battery plants in Germany and regulatory scrutiny mounted.
Meanwhile, merger and acquisition activity saw a small resurgence, led by Tencent’s €1.5 billion purchase of Polish game developer Techland. Still, dealmaking is expected to remain muted as China’s domestic R&D capabilities grow and the strategic value of Western technology fades.
Investments in renewable energy and other strategic sectors have also drawn heightened attention from European regulators keen to guard against undue foreign influence. But with some member states wary of antagonizing both Beijing and Washington simultaneously, and as China renews its diplomatic overtures to Brussels, analysts suggest a temporary easing of tensions could be on the horizon if only until the next political storm arises.
