As the United States intensifies its tariff pressures and global trade fragmentation continues to escalate, China and the European Union (EU) are enhancing their cooperation. This emerging partnership signals a shared commitment to openness, stability, and mutual benefit amidst an increasingly uncertain global economic environment, according to experts.

Chinese investments in the EU experienced a remarkable surge, rising 47 percent year-on-year to reach 10 billion euros, approximately 11.4 billion dollars in 2024. This marks the first significant rebound since 2016 and highlights the resilience of the economic ties between China and Europe.

The growth in investment can be attributed to an unprecedented increase in greenfield investments and a resurgence in mergers and acquisitions. A collaborative report from the Rhodium Group and the Mercator Institute for China Studies indicated that this trend reflects the enduring complementarities between China and the EU.

Analysts note that this momentum underscores the strategic significance of China-EU economic relations, particularly as Washington's unilateral tariff hikes pose risks to global supply chains. By reinforcing collaboration in green energy, digital infrastructure, and smart manufacturing, both sides can meet their development objectives while also preserving the integrity of the multilateral trading system.

In terms of investment specifics, China's greenfield investments in Europe have increased for three consecutive years, achieving an all-time high of 5.9 billion euros. Concurrently, investment in mergers and acquisitions more than doubled, reaching 4.1 billion euros in 2024.

Leading the charge in investment is the Chinese battery giant Contemporary Amperex Technology (CATL), which accounted for 16 percent of total investments in 2024, primarily due to the ongoing construction of its battery facility in Hungary.

Ding Chun, the director at Fudan University’s Centre for European Studies, commented on the substantial common ground and potential for cooperation between China and the EU, particularly in sectors such as green energy, smart manufacturing, and artificial intelligence.

By the end of 2024, EU enterprises had cumulatively invested over 150 billion dollars in China, illustrating the deep-rooted economic ties. Ding emphasized the need for China and Europe to work collaboratively to stabilize the multilateral trading system and global industrial chains amidst rising trade disputes.

Recently, discussions have emerged between China and the EU regarding the potential lifting of tariffs on Chinese electric vehicles (EVs) through commitments to minimum prices, signaling a proactive approach to trade relations.

Looking towards the future, the report suggests that China’s investment in Europe could further increase in 2025, with improved EU-China relations anticipated amidst the backdrop of the United States' new trade war efforts.

Simon Lichtenberg, chairman of the Danish Chamber of Commerce in China, pointed out that Europe is increasingly aware of its over-dependence on the US, and is now striving for a more autonomous stance in its economic policies. This change in perspective presents an opportunity for a strengthened China-EU partnership amidst a complex geopolitical landscape.

Lichtenberg emphasized the exceptional manufacturing capabilities of China, asserting that failing to leverage this strength could jeopardize important segments of the global value chain. He further advocated for the necessity of upholding global trade, stating that cooperation between China and the EU could yield mutual benefits for all parties involved.

Yao Ling, director at the European Institute of the Chinese Academy of International Trade and Economic Cooperation, highlighted that with a combined economic output exceeding one-third of global GDP and a trade volume surpassing one-fourth of worldwide trade, China and the EU represent significant economic partners, with vast prospects for collaborative growth. He added that strengthening their partnership within the global trading framework could help mitigate the impacts of the disruptive unilateral tariff policies enacted by the US.