Capital Inflection Point: Structural Rebound After Seven Years of Decline
In 2024, China's foreign direct investment (FDI) in the EU and the UK reached €10 billion, a 47% year-on-year increase and the first significant recovery since 2016. After a seven-year downward cycle, this figure is itself symbolic—it is not a simple cyclical fluctuation, but the product of multiple intertwined variables including global capital flows, industrial competition, and geopolitics.
From a global perspective, Chinese enterprises' total outward FDI also rebounded in 2024, reaching €52 billion, reversing seven consecutive years of contraction. Among this, emerging markets absorbed 64% of Chinese capital, while Europe's share among high-income economies remained as high as 53.2%, underscoring its critical position in the global allocation of Chinese capital. In contrast, Chinese investment in the U.S. continued to shrink, totaling less than €2 billion for the year, accounting for only 4% of global outward investment. The reversal of transatlantic investment flows has become a direct reflection of great-power economic competition at the capital level.
The force driving this rebound does not come from a return of traditional M&A, but from the further strengthening of greenfield investment's dominant position. In 2024, Chinese greenfield investment in Europe reached €5.9 billion, a 21% year-on-year increase, setting a record high for the third consecutive year and accounting for nearly 60% of China's total investment in Europe. This reflects a shift in Chinese enterprises' investment logic: from M&A seeking brand and technology assets to deep supply chain embedding centered on localized capacity building.
Industrial Chain Migration: The EV Wave Reshapes China-Europe Capital Ties
The automotive industry remains the core of the China-Europe capital link. In 2024, this sector attracted €5.2 billion in Chinese investment, a 57% year-on-year increase, accounting for more than half of all investment in Europe. Among this, EV-related projects' share of Chinese greenfield investment in Europe has soared from 17% in 2021 to 83% in 2024, becoming absolutely dominant.
This trend resonates with the global electrification transformation of the automotive industry. Facing the EU's Carbon Border Adjustment Mechanism, emissions regulations, and potential tariff barriers, Chinese EV and battery companies have chosen to build capacity in the heart of Europe to avoid trade frictions and stay close to end markets. CATL's battery plant in Hungary, BYD's newly built EV base in Hungary, and Envision Power's battery project in France are all typical footnotes to this logic. These large greenfield projects have not only brought capital, but also driven the coordinated transfer of supporting supply chains such as lithium battery materials and intelligent systems, accelerating Central and Eastern Europe's integration into the global new energy supply chain.
However, it is worth noting that the value of newly announced Chinese EV greenfield projects in Europe in 2024 has dropped significantly, and three major EV battery projects were cancelled during the year. This means that while existing projects are still advancing, the momentum of future new investment may weaken. If EV investment declines, no other industrial sector can currently fill this gap, casting doubt on long-term sustainability.
Regional Reshuffle: Hungary's Rise and the Decline of the Big Three## 区域洗牌：匈牙利崛起与Big Three式微
The geographic shift in the investment landscape is one of the most noteworthy signals of 2024. Hungary became the largest destination for Chinese investment in Europe for the second consecutive year, absorbing €3.1 billion over the year, a 73% year-on-year increase and accounting for 31% of China's total investment in Europe. By contrast, the combined share of the three traditional destinations—the UK, Germany, and France—plummeted to just 20%, down from an average of 52% between 2019 and 2023.
The core reason Hungary stands out lies in its unique policy positioning and industrial base. The government has actively attracted the battery supply chain through tax incentives, subsidies, and a lenient foreign investment review mechanism. Combined with its location in Central Europe, a mature automotive industry ecosystem, and labor advantages, Hungary has quickly become a bridgehead for Chinese battery and electric vehicle companies entering the EU market. Yet this concentrated footprint also carries risks: if the EU's overall policy environment for Chinese investment tightens, over-reliance on a single point could turn Hungary into a focal point of contestation.
Meanwhile, the declining share of established economies such as Germany, France, and the UK is not because Chinese investors have lost interest, but because these countries have stricter review mechanisms and longer lead times for greenfield projects. For example, the UK did not feature among the top ten Chinese investment projects in Europe in 2024, and although Germany still holds a large cumulative investment stock, its role in new investment has clearly been replaced by Central and Eastern Europe. This suggests that Europe's receptiveness to Chinese capital is diverging internally, forming a "policy gradient" between East and West.
政策博弈与资本管制的双向张力
The rebound in Chinese investment in Europe is taking place against an increasingly complex economic and geopolitical backdrop. On the one hand, Chinese companies face slowing domestic growth, overcapacity, and intensifying market competition, which strengthens their impetus to go overseas. On the other hand, the US and Europe are tightening technology security reviews of Chinese investment, and discussions at the EU level over whether to impose conditional reviews on greenfield projects are also heating up. At the same time, the Chinese government, out of concern over technology outflows, continues to maintain strict capital controls, which constitutes another constraint on Chinese companies' overseas expansion.
Against this two-way tension, the rebound in 2024 is hard to interpret as the starting point of a new wave of liberalization. In fact, the global race for green transition, the pursuit of supply chain resilience, and the rise of protectionism—these three forces are jointly reshaping the logic of international investment. Chinese capital is no longer merely looking for cheap factory locations; it is trying to establish a presence at key nodes of the industrial chain, thereby piercing through trade barriers and consolidating market access.
长期趋势：结构升级背后的隐忧
Looking ahead to 2025, Chinese investment in Europe could still grow further—supported by the recovery of large M&A deals and battery factory projects already confirmed to be under construction. However, the sharp drop in new EV project value and the cancellation of several projects cast a shadow over the medium- to long-term outlook. The more fundamental question is whether Chinese investment in Europe can move from "single-point breakthroughs" to "diversified support."
From the perspective of the rise of the Global South, Chinese capital is increasing its footprint in regions such as Southeast Asia, the Middle East, and Latin America. But Europe remains an irreplaceable market for its technological upgrading and brand penetration. If this assessment holds, then even if EV investment growth slows, investment in other areas may gradually fill the gap—such as green energy infrastructure, the digital economy, and high-end manufacturing. However, this requires European policymakers to provide a more predictable investment environment, and also requires Chinese companies to demonstrate stronger adaptive capabilities in corporate governance and localized operations.
The 2024 rebound in Chinese investment in Europe may itself be a coordinate point in the restructuring of global supply chains. It reminds us that, beyond the narratives of "de-risking" and "friend-shoring," capital continues to seek the most advantageous landing points according to industrial logic. In the years ahead, the investment relationship between China and Europe will no longer be a one-way flow issue, but a complex game involving rules, resilience, and interdependence.