China Direct

MERICS - Chinese Inward Investment Trends into Europe - A Report

Berlin, May 9, 2023. Battery investments are now the mainstay of Chinese investment in Europe, showing that the region has become a key part of China’s global electric vehicle (EV) expansion. 

This is one of the key findings from a report published today by the Mercator Institute for China Studies (MERICS) and Rhodium Group on the latest trends in China's foreign direct investment (FDI) footprint on the EU-27 and UK.
According to the authors, there has been a substantial shift in the nature of Chinese investment in Europe: driven by EV battery factories, greenfield investment now dominates Chinese investment activities in the region, reaching EUR 4.5 billion and 57 percent of China’s total FDI in Europe in 2022. 

Chinese greenfield projects, in which parent companies create subsidiaries in foreign countries and build operations from scratch, overtook mergers & acquisitions (M&A) in Europe for the first time since 2008. The latter fell to EUR 3.4 billion in 2022, the lowest level since 2011.

The increase in greenfield investment was driven mainly by a few large-scale projects, almost exclusively concentrated in the automotive sector as Chinese battery giants – including CATL, Envision AESC and SVOLT – invested in building plants in Germany, Hungary, the UK and France.

These four countries were also the main recipients of Chinese investment in Europe in the past year, accounting for 88 percent of China’s total FDI. All four not only received major greenfield investments, but also most of the year’s M&A activity. 

Overall, Chinese investment in the EU and the United Kingdom continues to decline, dropping to a decade low of just EUR 7.9 billion in 2022, down 22 percent compared to the year before. This takes Chinese investment back to its 2013 level. As in 2021, consumer products and automotive remained the two top sectors, accounting for three quarters of total Chinese investment in Europe.  

Ongoing and new greenfield investments will put a floor under aggregate investment amounts, and Chinese firms are considering further expansion in Europe in segments of EV value chains, including vehicle production. Yet these will not be enough to create a long-lasting rebound in overall Chinese FDI in Europe, as the experts from MERICS and the Rhodium Group write. 

You can read the report “EV battery investments cushion drop to decade low: Chinese FDI in Europe – 2022 update” by Agatha Kratz, Max J. Zenglein, Mark Witzke and Gregor Sebastian online here.

Best regards,
Claudia Wessling, Director Communications and Publications MERICS 

Our sincere thanks to Claudia Wessling and the team at MERICS for providing this report.

The Chosen Few: A fresh look at European FDI into China - Rhodium Group

After decades in which China felt like a one way bet for European firms, market conditions have become far more challenging due to restrictive COVID-19 policies, slowing economic growth and rising geopolitical tensions. Against this increasingly uncertain backdrop, we have taken a close look at European (EU+UK) FDI in China to assess the current state of investment on the ground, and shed light on how it has evolved over the past decade. Our key finding is that European investment has grown much more concentrated, both in terms of the companies that are investing there, the countries they come from, and the sectors in which they operate. While a handful of large firms, many of them German, continue to pour money into their China operations, many other firms with a presence in China are withholding new investment. At the same time, virtually no new European firms have chosen to enter the Chinese market in recent years. And acquisitions of Chinese firms have stalled, with greenfield investments increasingly dominating the FDI landscape.

Our findings point to a widening gap in how European firms perceive the balance of risks and opportunities in the Chinese market. They also suggest that a more nuanced perspective on the issue of European corporate dependencies is needed. From a direct investment point of view, it is wrong to talk about a broad-based dependence of European, or even German, companies on the Chinese market. As policymakers in Berlin and other European capitals consider measures to reduce economic dependence on China, they would be wise to take the growing concentration of corporate risks into account.

To read the full Rhodium Group research note please click here.

Our sincere thanks to the team at Rhodium Group for kindly sharing this information.

Dates for Diaries: Webinar - Vietnam's top FDI Destinations Binh Duong and Dan Nang - 03 March 2022

 

As of December 2021, countrywide, Binh Duong was second to Ho Chi Minh City, while Da Nang topped the Central Vietnam, in terms of FDI attraction. Join us in the upcoming webinar Binh Duong, Da Nang: Vietnam's Top FDI Destinations, a part of BritCham Vietnam's Sector-focused Webinar Series, where we discuss dynamic, opportunities, and legal highlights to foreign investors in these two rising cities. 🔺Webinar Information: 📄Sector-focused Webinar: Vietnam's Top FDI Destinations - Binh Duong and Da Nang 📆Time: 16:00 - 17:00 VN (09:00 - 10:00 UK) Tuesday, March 01 2022 👉Registration link: https://lnkd.in/gJs-Tr3e 🤵🏼Our expert panelists include: 🔹Mr Vo Son Dien - Advisory & Marketing Director - Becamex IDC Corp.,  🔹Ms Huynh Lien Phuong - Director - Da Nang Investment Promotion Agency (IPA Da Nang) 🔹Mr Tom McClelland - Country Tax Leader - Deloitte Vietnam 🔺The webinar is moderated by  Mr Alexander Falter- Managing Director - ECCO Shoes cum Vice Chair of the Board - BritCham Vietnam #FDI #VietnamFDI #Investment #VietnamInvestment #Danang#BinhDuong

Our thanks to Britcham Vietnam for kindly sharing this information.

Dates for Diaries: Doing Business in Singapore Webinar 16.11.21

About this webinar:

Are you looking to successfully start, expand or grow your UK business in Singapore?

Singapore is a wealthy city-state and is the leading financial, shipping and trade hub for the Asia Pacific region. For UK SMEs, Singapore is one of the easiest places in the world to start, run and do business (World Bank, 2019) as both economies have similar business & legal practices and share similar technical standards. In March 2019, the UK exported £8.8bn of goods and services to Singapore (ONS, 2019) providing a strong economic foundation and multiple advantages for UK businesses looking to establish an international presence.

Why should you join this webinar?

This free webinar is designed to help your UK business understand the major market opportunities in Singapore, the benefits of expanding to this lucrative market and how to overcome barriers when doing business overseas. 

Join the webinar on Tuesday, 16 November 2021 to hear from market experts as they share insights, tips and strategies to expand your products or services in Singapore with success.

What will you learn?

• An overview of the current Singaporean market
• Understand the cultural differences and considerations when doing business with Singaporean people and companies
• Uncover the various business regulation considerations
• Learn how to formulate a market entry strategy for success
• Find out the barriers and common pitfalls facing UK exporters
• Receive advice and guidance from Singaporean market expert

To register please click here.

 

Chinese investment in UK: growth continues in H1 2021

Chinese investors continue to make a significant contribution to the UK economy in the first half of 2021. Simon Bevan and Ian Zhu look at the deals and trends you need to know about. The number of Chinese investments in the UK during H1 2021 reached pre-COVID-19 levels, showing a healthy rebound in deal activity with a 44% increase year-on-year. Deal value for the period has plummeted by 68% to £1441 million, but this is due to one exceptionally high-value deal in H1 2020: Chinese Resources Group’s £4.2 billion acquisition of UK recycling business Viridor — the biggest deal of the year.

For more information and the latest insights into Chinese investment in the UK please visit here.

Our thanks to Simon Bevan and Ian Zhu of the China Britain Business Group at Grant Thornton LLP for kindly sharing.

Virtual Invest Beijing Trade Promotion Event 10.06.21

Dear CBI Members and stakeholders,

Please find attached an invitation and webinar link to a trade promotion event taking place in Beijing this Thursday 10th June from 0930-1020 (UK) 1630-1720 (BJ).

Download Online Promotion Event 2 Zones Beijing 10.06.21

Download 英美云推介企业邀请函英文版

Our thanks to CBI member PwC for kindly sharing this information.

 

Irwin Mitchell: UK Powerhouse Report 2021: How Foreign FDI will help UK Cities Recover

CBI Member Irwin MitchelI has just published the 2021 UK Powerhouse Report which looks at how foreign direct investment (FDI) will play an instrumental role in helping UK cities recover.

Please refer to the Executive Summary and insights via the link below:

UK Powerhouse Report

Our thanks to Irwin Mitchell for kindly sharing this report.

 

CCCUK launches Chinese FDI in the UK Report

 

Dear CBI Members and Partners,

Please find the 2020 Report on the Development of Chinese Enterprises in the UK, which was launched by the China Chamber of Commerce in the UK (CCCUK) on 25th November.

The report reviews the current UK landscape and investment environment, impact of COVID-19 and Brexit, and explores future prospects for Chinese enterprises in the UK.

Download CCCUK Report on the Development of Chinese Enterprises in the UK