European companies are accelerating investments in the Chinese mainland following a year of sustained economic engagement, with 2025 data revealing a 14% year-on-year increase in cross-border partnerships. Analysts attribute this trend to growing confidence in China's innovation-driven sectors and its pivotal role in global supply chains.
Key growth areas include renewable energy infrastructure, electric vehicle (EV) manufacturing, and AI research. German auto giant Volkswagen recently announced a €2.1 billion expansion of its Anhui EV plant, while French energy firm TotalEnergies signed agreements this month to develop carbon capture facilities in Shandong province.
"The Chinese market remains central to our decarbonization strategy," said TotalEnergies CEO Patrick Pouyanné during a March 10 press briefing in Shanghai. "Our 2026 roadmap includes three new joint ventures focused on green hydrogen production."
Despite geopolitical uncertainties, EU-China bilateral trade reached €856 billion in 2025 according to Eurostat figures released last week. The European Chamber of Commerce in China reports that 68% of member firms plan to maintain or increase mainland investments this year.
Challenges persist in navigating regulatory changes and local competition. However, the National Development and Reform Commission's February policy package offering tax incentives for smart manufacturing has been welcomed by overseas investors.
