China shock 2.0: Should Europe welcome Chinese investment?
Englishto
Brussels fears a new wave of “China shock,” but this time, it's not just about low-cost Chinese goods: the focus is on direct investments by Chinese companies opening factories in Europe. The EU’s demand is clear: If you come to manufacture here, you must transfer expertise and hire local workers. The point is that the dominant narrative views these investments as a threat – a risk of technological dependence, a loss of strategic control, and even security concerns. But if you look at the numbers, the reality is less clear-cut. Over the past five years, the share of Chinese investment in the European Union has fallen from a peak in 2016, when it accounted for nearly 3% of total foreign investment, to less than 1% today. Therefore, China's presence, at least in terms of capital, is much less pervasive than is commonly perceived. Take the case of CATL, the Chinese battery giant: it has just opened a plant in Germany, promising not only jobs – over 2,000 hires – but also close collaboration with local suppliers of components and technologies. The plant manager, Li Ping, stated: “If we want to succeed in Europe, we must be part of Europe.” These words sound like a commitment, but also like an acknowledgment that integration is the only way to avoid being perceived as Trojan horses. Yet mistrust persists. In France, a mayor who welcomed a Chinese electric car factory was criticized by Brussels: “It is not enough to create jobs; we need to ensure that know-how is not siphoned off to Beijing.” Here lies the twist: the real risk is not so much China's presence as our inability to manage what these investments bring—namely, the challenge of establishing rules that do not drive investors away while also not selling off technology and jobs. There is one fact that few people mention: 60% of the workers employed in Chinese factories in Europe are European citizens, and in many cases, companies have agreed to share patents and production processes in order to obtain permits and incentives. But the question no one is asking is: Are we really prepared to use these investments as leverage to strengthen our industry, rather than simply fearing them? If we continue to view every Chinese euro as a threat, we risk losing not only capital but also the opportunity to learn and compete. There is another perspective that is often overlooked in this debate: while the West is concerned about protecting its technologies, China itself is beginning to fear the exodus of know-how to Europe. Some Chinese executives, speaking on condition of anonymity, admit that “sending our best engineers to Europe is a double-edged sword: we teach and we learn, but we risk losing talent.” The argument, in a nutshell: Closing the door to Chinese investment may seem prudent, but it could mean giving up one of the few concrete opportunities to strengthen our industry. If this perspective has helped you see the issue in a new light, on Lara Notes you can mark I'm In if you believe that Europe's future also hinges on these choices—not just on whether to close or open the door, but on how we open it. And if tomorrow you find yourself telling someone that the real risk is not the arrival of China, but our response, you can tag them with Shared Offline: on Lara Notes, that exchange is recorded, like a conversation that matters. This Note comes from the Financial Times and has saved you about one minute of reading time.
0shared

China shock 2.0: Should Europe welcome Chinese investment?