China’s investment in Europe has reached its highest level since 2018 and surpassed other high-income economies for the first time, a new report shows, although exports remain Chinese companies’ preferred means of doing business.
While Chinese foreign direct investment (FDI) in the US is flatlining at the lowest level in a decade amid geopolitical tensions, China has increased its share of total investment in the more open European market. The region accounted for around 25% of Chinese global investment in 2025, up from 17% in 2024, according to a joint report by Rhodium Group and the Mercator Institute for China Studies (MERICS), a Berlin-based think tank.
China invested EUR 16.8 billion (USD 19.5 billion) in Europe, including the UK, last year, according to the report. That was up 67% on the year, with 42% directed toward the electric vehicle supply chain. Mergers and acquisitions drove the growth, jumping 89% to EUR 7.9 billion (USD 9.2 billion), while greenfield investment—building facilities from the ground up—increased 51% to EUR 8.9 billion (USD 10.3 billion).
The growth comes as Chinese companies chase overseas opportunities to offset sluggish economic conditions at home and get around trade friction. Despite the rise in completed investments last year, however, the total in Europe was still less than half the peak in the middle of the last decade, as overall outbound flows remain far lower. The report also stresses that newly announced transactions were subdued in 2025, at EUR 5.2 billion (USD 6 billion), versus EUR 16.9 billion (USD 19.6 billion) worth of plant and equipment announcements in 2023.
