As Chinese investment flows into the EU increase, the lack of equal market access is increasingly becoming a problem in investment relations with China. While Chinese investors enjoy the same rights in the EU market as any European business, China continues to limit access for foreign companies in many sectors.
This report consists of two parts: a sector-by-sector comparison by Thilo Hanemann (Rhodium Group) and Mikko Huotari (MERICS) reveals that Chinese investments into the EU surpassed investments by EU companies in China in 10 out of 15 industries in 2017. Another finding of „EU-China FDI: Working towards reciprocity in investment relations with China“ is that the majority of large Chinese acquisitions in the EU would not have been possible for EU companies in China, as Chinese government regulations prevent foreign companies from doing business in the respective sectors. The imbalance is most visible in the transport and infrastructure sector.
In the latest update of their monitoring of Chinese outbound foreign direct investment, Hanemann and Huotari analyze Chinese investment patterns in Europe in 2017. The analysis "Chinese FDI in Europe in 2017: Rapid recovery after initial slowdown" finds that Europe clearly remains open to Chinese investment despite growing discussions about the need to better protect critical infrastructure.
At 30 billion EUR, Chinese foreign direct investment in the 28 EU economies was at the second highest level ever recorded in 2017. The largest recipients of Chinese investment were transportation, utilities and infrastructure (15.3 billion EUR), information and communication technologies (4.8 billion EUR) and real estate and hospitality (2.9 billion EUR). Strong Chinese investment in the EU is likely to continue in 2018.