CHINESE investment in Europe plunged 22 per cent last year to a 10-year low, according to a new study, reports Bloomberg.
The shift toward greenfield investments in electric-vehicle batteries only partially offset the steep decline in mergers and acquisitions.
Foreign direct investment in Europe from China sank to EUR7.9 billion (US$8.7 billion),, according to a report published by the Berlin-based Mercator Institute for China Studies and New York-based Rhodium Group. It was the first year that greenfield investments, which increased 53 per cent, outpaced deals.
A range of factors contributed to the plunge, the authors said, including rising interest rates, growing strategic risks linked to Russia's invasion of Ukraine, China's constraints on capital outflows and Beijing's zero-Covid strategy, which was in place for most of 2022. Globally, China's investment activities fell 23 per cent.
In Europe, nearly 90 per cent of the investment flowed to just four countries: Britain, France, Germany and Hungary. Each received major greenfield investments by Chinese battery makers, which are expected to dominate the industry in Europe.