Spain, Sweden and Cyprus also attracted more than €1 billion each, driven by big deals in the renewable energy and entertainment sectors, such as China Three Gorges’ acquisition of the Mula solar plant in Spain and Tencent Holdings’ purchase of mobile game developer Easybrain in Cyprus.

In terms of sectors, Chinese investment was still heavily concentrated on the automotive industry, with €7.6 billion of deals completed in 2025. Entertainment was the second most popular category at €2.3 billion, followed by consumer products and services at €2 billion.

Much of the automotive investment was driven by China’s flourishing electric vehicle brands, with deals increasingly spreading beyond Hungary to countries including Germany, Spain and Slovakia.

Chinese firms still often favour exporting directly from China to investing in Europe, driven by a mix of factors including Europe’s high production costs, the market’s relative openness to Chinese imports, a weak yuan boosting export competitiveness, and domestic overcapacity reducing the need to build new facilities abroad, the report said.

Moreover, Chinese FDI in Europe is coming under pressure from governments on both sides, as Beijing prioritises domestic industrial capacity over overseas expansion and Brussels subjects Chinese investment to intensifying scrutiny, according to the study.

“They may choose to delay investment decisions until there is more clarity on the key elements of these proposals, which must still be approved by the European Parliament and member states,” it said.

The European market also is likely to remain relatively open to Chinese exports in the medium term, the study said. Policies designed to onshore more production, such as the IAA, will take up to two years to put in place. Meanwhile, there is the possibility that China could retaliate, with US tariff policies limiting Brussels’ ability to respond.