October 31, 2024

EU investments in China soar to new quarterly record of US$3.9 billion

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Greenfield investments – the creation of a new company or establishment of new facilities – soared to €3.6 billion (US$3.9 billion) in China from April through June, according to the Rhodium Group consultancy.

This was the highest quarterly level on record and well above the average quarterly EU investment of €1.8 billion since 2022. German companies accounted for 57 per cent of the total EU greenfield investment in China over the first half of the year.

The top five EU corporate investors were Germany’s Volkswagen, BMW and chemicals giant BASF, Sweden’s Ingka Group – which owns furniture retailer Ikea – and Dutch-incorporated tech company STMicroelectronics.

According to the Rhodium Group analysis, carmakers have accounted for roughly half of all EU investments in China since 2022. The splurge on greenfield sites is likely driven by companies’ desire to localise their production; in a bid to protect their Chinese supply chains from geopolitical tensions, more firms are manufacturing “in China for China”.

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The investment surge comes despite a rise in trade tensions between the EU and China, partly centred on the automotive sector.

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