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A New Record Year for Chinese Outbound Investment in Europe

Joint report by Rhodium Group and MERICS

Chinese investment in Europe has grown exponentially in recent years, as discussed in our in-depth special report (“Chinese FDI in Europe and Germany – Preparing for a New Era of Chinese Capital”) released last year. This note provides an update on Chinese investment patterns in Europe in 2015. The authors arrive at the following key findings:

  • China’s global outbound FDI continued to surge in 2015 and the Chinese leadership touts investment as a new pillar of China’s positive contributions to the global economy.
  • Chinese OFDI in Europe hits another record high in 2015, highlighting the potential for China as a source of productive capital but also reinforcing existing concerns.
  • The new realities of slower growth and transition to a new economic model explain Chinese investors’ focus on advanced industrial assets, modern services, and real estate.
  • State-owned investors continue to account for a majority of China’s EU OFDI, and new financing entities could further boost the role of state capital.
  • Chinese investment increasingly extends beyond the “Big Three” economies (Germany, France, UK), fuelling the intra-European competition for Chinese capital.
  • Germany remains one of the most appealing destinations for Chinese investors looking for technology, consumer markets, and safe haven assets.
  • China’s global investment boom is unlikely to end any time soon but China’s fight against capital flight and bad debt pose short-term risks for 2016.
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