China’s relationship with Europe has grown significantly in recent decades, making China one of Europe’s most important trading partners. The trade between them covers a wide range of goods, including vehicles and aircraft products. Additionally, Europe has become a major investor in China, with various European manufacturing plants operating across the country. A prime example is Volkswagen, one of Europe’s largest corporations, which has several factories in China and sells millions of vehicles there annually. On the flip side, China has also become a large investor in Europe, particularly targeting wealthy economies like Germany, France, the UK, and the Nordic countries. However, many Chinese investments are not always visible, leading to limited awareness of how deeply China is involved in European markets. Let’s explore some of the most important deals China has made in Europe to understand its role better.
One of the largest Chinese investments in Europe was the 2017 acquisition of Syngenta, a Swiss-based agricultural technology giant. Syngenta specializes in pesticides, herbicides, fungicides, and insecticides, and has faced criticism over its environmental impact and lobbying activities. In 2012, the company was even nominated for the Public Eye Award for its controversial practices. The Chinese state-owned company, China National Chemical Corporation (ChemChina), purchased Syngenta for $43 billion. With this acquisition, China gained control over one of the world’s largest agricultural tech companies, generating over $120 billion in revenue through the merger.
In the UK, Chinese companies have invested in major sectors, such as Thames Water, the country’s largest water and wastewater services provider. Although the China Investment Corporation holds just under a 9% stake in Thames Water, it represents another example of China’s presence in critical industries. Additionally, Chinese involvement extends to the UK’s energy sector, particularly in the Hinkley Point C (HPC) nuclear power plant project. The China General Nuclear Power Group (CGN), a state-owned company, initially invested in the project. However, tensions between the UK and China, including diplomatic conflicts, led the UK government to remove CGN from its 20% stake in another energy project, Sizewell C. As a result, CGN’s investment in Hinkley Point C was suspended, leaving EDF, the French company partnering with CGN, to shoulder the financial burden.
Chinese investment in Europe also extends to the automotive sector. Volvo Cars, one of the world’s most recognized brands, was acquired by China’s Geely in 2010. At the time, Volvo was struggling financially, and Geely saw an opportunity to leverage the brand’s reputation to produce luxury vehicles for China’s rapidly growing auto market. Since the acquisition, Volvo has reported significant sales and income, reinforcing the success of the investment.
In Portugal, China’s investment is also notable. Energias de Portugal (EDP), a major energy company, saw China Three Gorges (CTG) acquire a 21.35% stake in 2011. This partnership aimed to enhance renewable energy projects globally, with EDP focusing on Europe, the US, and South America, while CTG took the lead in Asia. Despite its benefits, this investment highlights China’s ongoing strategy of using state-owned corporations to gain influence in strategic industries worldwide.
Another controversial investment occurred in Italy when ChemChina acquired Pirelli, a well-known tire manufacturer, in 2015. The €7.1 billion deal transferred a significant portion of Italy’s iconic brand to Chinese ownership. However, as tensions grew between China and European countries, the Italian government moved to safeguard Pirelli’s independence, ensuring that key decisions remained under Italian control despite the Chinese stake.
These examples of Chinese investments in Europe illustrate both the benefits and challenges they bring. While China’s involvement has boosted industries and economies, it has also sparked concerns about political influence and control over strategic assets.