Illustration: Liu Rui/GT

Chinese investment in Europe is continuously evolving. A recent example was contained in a report by Bloomberg on Wednesday, stating that Chinese entities, previously focused on investing in European infrastructure, are shifting their attention to building their own factories. This, along with other data, indicates a trend: Chinese investment in Europe is moving up the value chain.

Chinese investment in Europe is noteworthy not just in traditional sectors but also in emerging industries. In recent years, Chinese companies, particularly those in the electric vehicle (EV) and battery supply chains, have been ramping up their investment across Europe. This trend highlights a promising area of cooperation between the two regions. 

Taking Germany as an example, the People's Daily reported in May, citing a report by Germany Trade & Invest, that Chinese investment in Germany remained stable in 2024, ranking third - just slightly behind the US and Switzerland. In terms of industry focus, Chinese enterprises remained active in the renewable energy sector, with 31 investment projects, while electronics, automation, transportation, and logistics were also key areas of investment.

Traditionally, mergers and acquisitions have been the main approach for Chinese investment in Europe. However, studies suggest that in recent years, there has been a rise in greenfield investment projects. Greenfield investments involve investors establishing new businesses and production facilities from the ground up, which adds "new capital assets" and involves physical investment in the host country. Economically, this often leads to increased tax revenue and job creation.

This may explain why Chinese greenfield investments, particularly in the EV, battery, and other emerging technology sectors, are welcomed by many European countries, especially amid rising international economic uncertainties.

Chinese investments - which in some years have ranked first among Hungary's foreign investments - have become an "indispensable engine" of the country's economic growth, Hungarian Prime Minister Viktor Orban said in May. Orban emphasized that Hungary cannot enter the new technological era alone. "We need partners. And we can only enter this new era if there is Chinese-Hungarian strategic cooperation, because China leads in this industry's technology."

The continuous investment of Chinese companies in Europe transcends mere capital transfer. It leverages the complementary strengths of both parties in green manufacturing and digital intelligence. Through diversified approaches, it deeply integrates the technological, financial, and market advantages of both sides. This not only injects liquidity into the EU's industrial chains but also provides Chinese enterprises with avenues to embed themselves into the higher echelons of the global value chain. Ultimately, this leads to a joint advancement in both regions' economic development and growth potential.

Concurrently, investments in emerging technology sectors also reflect the industrial advancements of both China and Europe. China, with its rapidly developing renewable energy industry chains, has established systemic advantages in photovoltaics, wind power, and energy storage. Meanwhile, Europe is accelerating its pace in green transformation and industrial upgrading. Traditional investment fields and methods no longer fully meet the needs of both parties. Industrial upgrading is continuously generating new investment opportunities.

Chinese investment is continuously evolving. As of May, China's cumulative direct investment in the EU had reached $114.5 billion, with a year-on-year rise of 62.8 percent from January to May, according to the Xinhua News Agency.

The industrial advancements within both China and European nations are paving the way for new investment opportunities between the two regions. This evolution is broadening the scope of bilateral investments from traditional to emerging sectors. A pertinent question now is how to capitalize on these "new opportunities" to further expand economic cooperation between China and Europe. This involves bringing more investment to Europe while encouraging the expansion of China's emerging industries abroad.

In this process, there may be some challenges, especially as cooperation expands into new areas. Even when such collaboration brings increased tax revenue and job opportunities to local communities, it might still face obstacles such as protectionism. Adopting a more open mindset toward these new cooperative ventures is essential, allowing emerging industries the freedom to develop. It is essential to view these emerging economic opportunities without resorting to outdated zero-sum perspectives that politicize them.

The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn