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Chinese investment in Europe surged to a seven-year high in 2025, reaching €16.8 billion (US$19.5 billion), according to a report by the Berlin-based Mercator Institute for China Studies (Merics) and New York's Rhodium Group. The rebound was driven by a wave of major acquisitions and record-breaking factory projects, but analysts caution that the pipeline of new deals may be thinning, casting doubt on whether the recovery can be sustained.

Coverage Comparison

The report, published on Tuesday, has been covered by both RFI and the South China Morning Post (SCMP), with largely consistent figures. Both outlets highlight the headline number of €16.8 billion, marking the highest level of Chinese FDI in the European Union and the United Kingdom since 2018. They also agree on Hungary's continued dominance as the top destination, attracting approximately €3.9 billion, and note the sharp decline in the value of newly announced factory projects.

However, the two outlets place different emphasis on the findings. SCMP focuses on the strength of the rebound, noting that M&A activity rose 89 per cent year on year to €7.9 billion, while greenfield investment hit a record €8.9 billion. RFI, on the other hand, underscores the fragility of the recovery, quoting report co-author Andreas Mischer's warning that "the value of newly announced greenfield transactions has declined very drastically."

Both sources report that the EU-China Comprehensive Agreement on Investment (CAI) remains suspended, and that European policymakers have moved to tighten scrutiny of incoming Chinese capital, factors that could weigh on future investment flows.

Key Claims

  • Total investment at seven-year high: Chinese FDI in Europe reached €16.8 billion in 2025, up 67 per cent year on year, according to the Merics/Rhodium Group report, as reported by both RFI and SCMP.
  • M&A rebound: Acquisitions and mergers drove the recovery, rising 89 per cent to €7.9 billion, a figure reported by SCMP and consistent with RFI's description of a "wave of major acquisitions."
  • Record greenfield completions: Completed greenfield projects hit a record €8.9 billion, according to SCMP. RFI notes that the value of newly announced projects fell sharply, leaving the durability of the recovery in doubt.
  • Hungary retains top spot: Hungary attracted €3.9 billion in Chinese investment in 2025, buoyed by major EV battery projects from CATL and BYD, as reported by both outlets. However, Budapest's share of China's FDI in Europe shrank to 23 per cent from 32 per cent in 2024, according to SCMP.
  • France and Germany catch up: France saw Chinese investment nearly quadruple to €1.9 billion, while Germany's nearly tripled to €2.5 billion, according to RFI and SCMP. The combined share of France, Germany, and the UK rose from 23 per cent to 34 per cent.
  • Suspended investment agreement: The EU-China Comprehensive Agreement on Investment (CAI) remains suspended, a fact reported by RFI and consistent with SCMP's mention of "Europe's growing regulatory barriers."
  • Tightened scrutiny: European policymakers have increased scrutiny of Chinese capital, a trend noted by RFI and implied in SCMP's reporting on regulatory barriers.

Perspectives

Optimistic view: Strong rebound signals renewed interest

SCMP's coverage emphasizes the positive aspects of the data: a 67 per cent annual increase in total investment, a strong M&A rebound, and record greenfield completions. The report highlights that Europe's share of China's global FDI has grown to nearly a quarter, suggesting that Chinese investors are increasingly focusing on the region despite political tensions.

Cautious view: Recovery may be short-lived

RFI's reporting focuses on the downside risks. The sharp decline in newly announced factory projects — a leading indicator of future investment — and the ongoing suspension of the CAI are cited as reasons to doubt the sustainability of the recovery. Analyst Andreas Mischer's comments underscore this uncertainty.

Policy context: Europe's tightening stance

Both outlets acknowledge that European policymakers are tightening scrutiny of Chinese capital. This, combined with Beijing's push to retain industrial capacity at home, could limit future investment flows. The recent electoral defeat of Hungarian Prime Minister Viktor Orbán also introduces political uncertainty, though short-term disruption to existing projects is not expected.

Geographic shifts: Hungary's dominance waning

While Hungary remains the top destination, its lead is narrowing. The concentration of investment among France, Germany, and the UK has grown, suggesting a more balanced distribution of Chinese capital across Europe. This shift may reflect both market opportunities and regulatory considerations in different member states.

This article is based on reporting from RFI and the South China Morning Post on the Merics/Rhodium Group report on Chinese investment in Europe.