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Last year, investors from the People’s Republic bought a total of 119 companies in Europe. That was twenty companies fewer than a year earlier, and in the longer term almost 200 fewer acquisitions than in the record year 2016, EY announced on Tuesday.

According to EY estimates, investment amounts have also shrunk significantly: in 2023 there was still two billion dollars, less than half less than in 2022. However, EY has strongly pointed out that the purchase prices for the majority of Chinese business acquisitions and investments in Europe are unknown.

In addition to Switzerland, Germany and Austria also performed slightly differently at a low level because the number of Chinese acquisitions and investments actually increased: In Germany, EY counted 28 Chinese company acquisitions, two more than the year before. In Austria, two companies were taken over by Chinese, but by 2022 there would be only one.

Trend change in 2017

At the height of China’s short-lived investment boom in 2016, EY estimated spending by Chinese investors on corporate takeovers in Europe at nearly $86 billion. Since the trend break in 2017, both the number of company takeovers and the amounts invested have steadily decreased.

Experts see several reasons for this: Beijing’s leadership has been slowing capital outflows from China abroad for several years, and there are also the political tensions between China and the Western world, and more recently the weak Chinese economy compared to previous record growth.

Distrust of European companies

EY expert Sun Yi sees a reason for the development in the political distrust that Chinese companies encounter in Europe: “Potential Chinese investors check very carefully whether the choice of certain takeover candidates could lead to resistance from governments and discussions in the public,” said the head of China Business Services for Western Europe.

The EY expert expects that Chinese companies will invest more heavily in building their own factories in Europe in the coming years than in large company takeovers. For Chinese car and battery manufacturers, Hungary, Spain, France and Northern European countries are particularly attractive investment locations due to low energy costs, higher subsidies and fast approval processes. “Germany is not preferred here.” (sda/dpa)