Chinese direct investment in Europe: Economic opportunities and political challenges

Over the past decade, China has become one of the largest senders of foreign direct investment (FDI) in the world, including to the European Union (EU). Why did this rapid surge happen and how did European countries react politically to this new phenomenon, which some have presented as unprecedented and even dangerous? After surveying the recent evolution of Chinese FDI in Europe, this chapter analyzes the match between Chinese demand for European assets and European supply of assets after the outbreak of the Eurozone crisis. The last section considers the political challenges raised in Europe by the rapid and ubiquitous rise of Chinese FDI and some of the policy responses to these challenges.