European market China is significantly reducing investments

Status: 16.06.2021 12:53 p.m.

China invested less in the European market in 2020 than it has for ten years. Great Britain was particularly hard hit. It’s not just the corona pandemic to blame. China significantly reduced its direct investment in the European market last year. According to a joint report by the American Rhodium Group and Merics in Berlin, direct investments by the People’s Republic in the EU and Great Britain amounted to around 6.5 billion euros in 2020. Compared to the previous year, a decrease of 45 percent. That is the lowest level in ten years.

June 16, 2021

The Merics Report as a PDF download merics.org

Great minus for Great Britain

In the past year, even 77 percent less Chinese direct investment flowed into Great Britain. Even so, the UK remains one of the top three destinations for China’s investments in Europe – alongside France and Germany at the top. The three most important areas for Chinese investors were infrastructure, information and communication technology and electronics. Poland, promoted by a major acquisition, was a major new recipient last year.

01/14/2021

EU Chamber of Commerce warns China is increasingly going its own way The EU Chamber of Commerce in Beijing is sounding the alarm: China is increasingly decoupling from the USA and the EU.

Stricter controls on Chinese purchases

However, many Chinese purchases are now being scrutinized more closely by the EU member states than in the past. Several planned takeovers did not materialize. In Germany, for example, the Federal Ministry of Economics stopped the planned sale of the radar specialist IMST from North Rhine-Westphalia to a Chinese company with links to the military. Several EU countries, including Italy, France, Poland and Hungary, had tightened their inspection mechanisms for direct investments from third countries last year. Investments continued to decline in the current year, according to the report. The reasons are the pandemic, high hurdles for capital outflows from China and tighter controls in the EU.

10/01/2019

BDI policy paper Industry for more hardship against China German industry is calling for a tougher course in relation to China and is talking about “system competition”.

Sanctions dispute exacerbates tensions

In addition, the tense relations between China and the EU are likely to play a role. That’s the way it is Investment protection agreements agreed in December between the EU and the People’s Republic is currently on hold and ratification by the European Parliament seems to be moving further and further into the distance. Another point of contention remains the human rights violations in China: In March, the EU Sanctions imposed on Chinese politicians and an organization for the first time in 30 years . The EU accuses China of violating human rights by suppressing the Uyghur Muslim minority in the Xinjiang region. As a result of the European punitive measures, China also reacted shortly thereafter with sanctions against European institutions and several EU politicians . With information from Ruth Kirchner, ARD Studio Beijing, currently Berlin