Chinese investors and investment firms in Europe update 2023
Today, Chinese companies invest in Europe under the new frame, in fact, Chinese investments in Europe with those most significant five large-scale greenfield endeavours, all five projects of Chinese investments in Europe are in the automotive sector, resulting more continued generating projects and investment inflow eventually.
Quick brief:
Chinese investments in Europe – example of greenfield investments
Chinese companies invested in Europe with greenfield investments example, The pace of Chinese investments in Europe with M&A deals in general has been slowed down, among others, global direct investment flows dipped played a key role.
However, China investments in Europe took a new turn with greenfield investments risen, five battery factory projects, each worth billion euros. Plus, a solid 7.6-billion-euro investments by CATL in a Hungary factory, point out the clearer direction of Chinese investment in Europe.
Although Chinese investments in Europe with M&A deals have reduced, but greenfield investment has materialized. Today, majority Chinese top investments in Europe are greenfield projects, all are large-scale projects concentrated in the automotive sector.
In a long run, those greenfield investments projects will generate not less profits than sealed M&A deals in the past. The structure of Chinese investments in Europe has been shifted, also, the trend has been altered, from M&A deals making to large-scale greenfield projects.
Chinese investments in Europe driven by potentials & deficiencies
Chinese greenfield investments in Europe driven by China potentials & Europe deficiencies, particularly, the investments in battery plants in recent years, with China material and producing capabilities in developing EVs related investments in Europe. Chinese greenfield investments in Europe driven by potentials & deficiencies from both sides.
China is at the right moment as greenfield investments concern, today the automotive market in Europe is experiencing main changes, EV will be a major trend in the coming times. The investments in battery factories are part of a global push in further developing the EVs.
Due to climate changing concerns, the EU embark on decarbonization endeavours, specifically, the deadline is setting up, by 2035 combustion engine cars will be prohibited. Now the European automotive industry is expecting further develop EVs.
China is the first largest EV market, and the Europe is the second. So, the bigger picture of EV market is clear. further develop EVs, with battery producing deficiencies in local Europe , and China with its potentials comes to rescue.
Decarbonization efforts in Europe played a key role
Chinese companies have already invested $17.5 billion in total in associated sectors since 2018. According to a related report, for the decarbonization efforts in Europe, about 30% needed batteries will be suppled by Chinese companies by 2030. It means the Europe’s capacity for batteries will be supplied by Chinese companies in the coming period.
Chinese greenfield investments in Europe driven by China potentials and Europe deficiencies of battery producing capabilities. Due to climate changing concerns, the EU embark on decarbonization endeavours, specifically, by 2035 combustion engine cars will be prohibited. Now the European automotive industry is experiencing foremost changes, at the same time further develop EVs.
It worth to mention that Chinese greenfield investments in Europe demonstrated the competitiveness and maturity of Chinese companies have become in the global investment arena, Chinese companies are ready to take place in the investment, when the time and chance are ripe.
Chinese investments remain in three key economies in Europe
Chinese companies still focus on invest in Europe has not changed, which are Europe three-key-economies: DE, FR, GB, which is the usual case, according to the past trend of Chinese investment in Europe. It is not something new, the stronger economy, the more attractive for investments. So, the key destinations remain still the same for the Chinese investments in Europe: namely the “big three” economies - Germany, the U.K. and France.
This fact was proved again by the statistics Chinese investment in Europe in 2022 which greenfield investments played an important role, this “big three” economies together had 68% share (average 56% in the past), plus CATL investment in Hungary - a landlocked country in Central Europe, overall 4 countries (DE, Fr, UK, HU) with total 88% share of China’s FDI in Europe in 2022. Obviously, the trend is still not changed, the three key economies will remain as main destinations of Chinese investments in Europe.
Getting tougher for Chinese companies invest in Europe
Chinese companies invest in Europe are getting harder ever than before, facing more challenges and tougher future, Chinese companies are growing influence and becoming more competitive in Europe and globally. China is undeniable economic driving force, not only Chinese investments make enormous economic sense in the European continent, but also play a decisive role at the global economic arena at large.
Going further, Chinese investments in Europe are facing restrictive and expanded EU regulations, and likely to be prolonged beyond 2023. therefore, it is necessary that Chinese investors keep on strengthening the awareness of corporate social responsibilities, and the mindfulness of the impact of local cultural variations on companies’ business operations and act harder on a mutually beneficial partnership with the host countries.
Respecting local cultures, taking corporate social responsibilities is one thing, and strengthening its competitiveness, sharpening its maturity edge is another, even in tougher time, to build beneficial partnership for both parties is the key.
In the past, Chinese investments in Europe focus on what they need (brand products, and automation technologies, etc.), the world has so much to offer in quicker steps by then, M&A deals were the main Chinese investment strategy.
Today. Chinese investments in Europe focus on what Europe needs, or Europe & China both need, the circumstances have slow-down its offer availabilities. Chinese investors are showing more interest in strategic sectors due to pandemic has reframed the future of Chinese firms. Today, Chinese companies are gradually more driven, focuses on infrastructure and strategic dual use technologies in wide-ranging.
If you enjoyed reading China investments in Europe focuses - under the new framed future, we recommend you to read the latest trends and updates on regulatory developments, emerging asset classes, products… related subject here:
