Chinese investment in Europe hit 10-year low in 2022, down 22 per cent from year before: study

Beijing’s zero-Covid policy and Russia’s invasion of Ukraine weighed on flow of capital, which fell to US$8.7 billion

Greenfield investments accounted for 57 per cent of all China’s foreign direct investment in Europe last year

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Chinese investment in Europe in 2022 reached a level not seen since 2013. Photo: Shutterstock

Published: 6:00am, 9 May 2023Updated: 6:15am, 9 May 2023

Chinese investment in Europe plunged to a 10-year low in 2022, as the country’s zero-Covid policy coupled with geopolitical factors like Russia’s invasion of Ukraine weighed on the flow of capital.

Investment from China into the European Union and Britain fell to just 7.9 billion euros last year (US$8.7 billion), a 22 per cent decline on the year before.

This brought Chinese investments in Europe back to roughly the same level as 2013, before the huge flurry of spending that announced the arrival of Chinese President Xi Jinping’s Belt and Road Initiative.

The retreat in Europe aligned with a broad collapse in China’s global outbound investment, according to a joint study by Rhodium Group and the Mercator Institute for China Studies (Merics).

The Atto 3 electric SUV made by Chinese carmaker BYD on display at an electric vehicle trade show in Farnborough, Britain, in April. Much of China’s foreign direct investment in Europe is driven by EV battery sites. Photo: Reuters

Around the world, China’s investments fell to an eight-year low, at 111 billion euros, down 23 per cent on 2021’s levels. Mergers and acquisitions dropped by 21 per cent from a year earlier to 22 billion euros, amid a risky investing environment.

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