China, EU step up cooperation

China and the European Union are stepping up cooperation as the United States ramps up tariff pressure and global trade fragmentation deepens, signaling the shared commitment of China and the EU to openness, stability and mutual benefit in an increasingly uncertain world, experts said.

Chinese investment in the EU surged 47 percent year-on-year to 10 billion euros ($11.4 billion) in 2024, marking its first significant rebound since 2016.

The growth, driven by record-high greenfield investment and a revival of mergers and acquisitions, reflects the enduring complementarities between the two sides, according to a joint report released on Wednesday by the New York-based Rhodium Group and German think tank Mercator Institute for China Studies. Greenfield investment is a type of foreign direct investment in which a parent company starts a business operation in a foreign country from scratch.

Analysts said the momentum underscores the strategic importance of China-EU economic ties at a time when Washington's unilateral tariff hikes threaten to upend global supply chains. Strengthening cooperation in green energy, digital infrastructure and smart manufacturing will not only serve both sides' development interests, but also help safeguard the multilateral trading system, they added.

China's greenfield investment in Europe increased for the third year in a row and reached an all-time high of 5.9 billion euros, while merger and acquisition investment more than doubled in 2024 to 4.1 billion euro, according to the report.

Chinese battery giant Contemporary Amperex Technology, or CATL, emerged as the leading investor in 2024, accounting for 16 percent of total investment, mostly from the ongoing construction of its battery plant in Hungary, the report said.

Ding Chun, director of Shanghai-based Fudan University's Centre for European Studies, said, "China and the EU possess expansive common ground and enormous potential for cooperation in green energy, smart manufacturing and artificial intelligence."

As of the end of 2024, EU enterprises had cumulatively invested more than $150 billion in China, data from the Ministry of Commerce showed.

China and Europe should work together to safeguard the stability of the multilateral trading system and global industrial chains, rather than allowing trade disputes to spiral into broader geopolitical conflicts, Ding said.

Last month, China and the EU floated the idea of lifting the tariffs on Chinese EVs through possible commitments to minimum prices, known as price undertakings for imported cars.

A further increase in China's investment in Europe is possible in 2025, the report said, noting that EU-China ties could improve amid the US' new trade war.

Simon Lichtenberg, the All China founding chairman of the Danish Chamber of Commerce in China, told China Daily that Europe has recognized the problems arising from being overly dependent on the US in the past and is now seeking to cultivate a more independent stance and perspective.

This shifting mindset presents an opportunity for stronger China-EU cooperation, as both sides seek to navigate the complex geopolitical landscape, Lichtenberg said.

"China's manufacturing capability is truly outstanding, perhaps the best in the world," he said. "If we do not leverage it, we would be sacrificing a crucial part of the global value."

"Now more than ever, we need to uphold global trade," Lichtenberg added. "Together we are stronger, and we can all stand to win if we work together."

Yao Ling, director of the European Institute at the Chinese Academy of International Trade and Economic Cooperation, said that with combined economic might accounting for over one-third of global GDP and trade volume exceeding one-fourth of global trade, China and the EU stand as important economic partners, presenting immense opportunities for each other's development.

In particular, the deepening of China-EU cooperation within the framework of the global trading system could help mitigate the disruptive impact of Washington's unilateral and erratic tariff policies, Yao added.