How China-Europe cooperation can revitalize European industry

Editor's note: Jessica Durdu, a special commentator for CGTN, is a foreign affairs specialist and PhD candidate in international relations at China Foreign Affairs University. The article reflects the author's opinions and not necessarily the views of CGTN.

The sharp increase in Chinese greenfield investment in Europe in 2025 represents far more than a temporary flow of capital. It reflects the emergence of a deeper structural interdependence between the Chinese and European economies at a time when the global economy is facing supply chain disruptions, geopolitical uncertainty and the urgent pressure of green transformation.

According to recent research cited by Reuters, Chinese greenfield investment in Europe reached approximately 9 billion euros ($10.44 billion) in 2025, marking a 51% year-on-year increase. The automotive sector accounted for the overwhelming majority of this investment, particularly in the electric vehicle(EV) supply chain. This development should not be interpreted solely through the lens of competition. Rather, it demonstrates how China-Europe economic cooperation is increasingly becoming a stabilizing force for regional industrial resilience and long-term sustainable development.

From the perspective of complex interdependence theory in international relations, we can argue that modern economic relations are no longer shaped solely by zero-sum calculations. Instead, states increasingly rely on mutual economic connectivity to preserve growth, technological advancement and industrial competitiveness.

Europe's green transition agenda requires enormous industrial investment, advanced manufacturing capabilities and secure supply chains. Chinese enterprises, particularly in EVs, batteries, renewable energy technologies and critical components, possess substantial production capacity and technological experience that can complement Europe's industrial ambitions.

The rapid development of the EV industry provides perhaps the clearest example of this complementary relationship. Europe aims to accelerate decarbonization under the European Green Deal while simultaneously preserving industrial competitiveness.

However, the transformation of the automotive industry requires massive investment in battery ecosystems, charging infrastructure, raw material processing and advanced manufacturing. Chinese companies have become global leaders in many of these sectors through years of industrial scale-up, innovation and integrated supply chain development. Their investment in Europe therefore contributes not only financial capital but also industrial know-how, technological efficiency and production capabilities.

Some cases already demonstrate this dynamic. Chinese battery manufacturers establishing production facilities in countries such as Hungary and other parts of Central and Eastern Europe have contributed to local employment, regional manufacturing activity and the expansion of supplier networks. These investments help European automotive producers secure stable battery supplies closer to home, reducing logistical vulnerabilities exposed during the COVID-19 pandemic and subsequent global supply chain disruptions. In this sense, Chinese greenfield investment contributes directly to Europe's strategic objective of industrial resilience rather than undermining it.

The localization of production through greenfield investment also creates long-term economic value for host economies. Unlike short-term speculative capital flows, greenfield investments involve the construction of factories, research centers, logistics infrastructure and local procurement systems. Such projects generate employment opportunities across multiple layers of the economy, from engineering and manufacturing to transportation and services. At a time when several European economies are seeking new engines of industrial growth amid slowing global demand, these investments can provide an important source of regional economic revitalization.

Equally significant is the role of Chinese investment in supporting Europe's low-carbon transformation. Climate change has become one of the defining global governance challenges of the 21st century. Addressing it requires cooperation rather than fragmentation. Liberal institutionalist approaches in international relations emphasize that transnational challenges necessitate collaborative frameworks in which economic cooperation and shared technological development serve as instruments of collective benefit. In this context, China-Europe green cooperation represents a practical example of how major economies can align industrial interests with global climate objectives.

China has emerged as one of the world's largest producers of renewable energy technologies, EVs and battery systems. Europe, meanwhile, possesses advanced regulatory frameworks, research capabilities and strong consumer markets for green technologies. The integration of these strengths creates the potential for a mutually reinforcing partnership that can accelerate global decarbonization efforts.

Rather than viewing economic engagement through overly securitized narratives, a more pragmatic and development-oriented approach recognizes that sustainable industrial transformation depends on openness, connectivity and technological exchange.

For this reason, Europe's business environment will play a decisive role in shaping the future trajectory of China-Europe economic relations. Maintaining an open, inclusive, fair and non-discriminatory investment climate is an economic necessity for them. Predictability, regulatory transparency and equal treatment for foreign investors are essential components of long-term industrial planning.

If Europe seeks to remain globally competitive in advanced manufacturing and green industries, it must continue attracting international investment while avoiding protectionist tendencies that could increase production costs and slow innovation.

Historically, Europe has benefited enormously from open markets and international industrial cooperation. German automotive success, for example, was built not only on domestic innovation but also on deep integration into global supply chains and export markets. Today's green transformation requires a similarly outward-looking mindset. Excessive politicization of economic cooperation risks undermining industrial efficiency and delaying Europe's climate objectives.

The rise of Chinese greenfield investment in Europe reflects the growing reality that the green economy will be built through international cooperation rather than isolation. Shared interests in sustainable development, technological innovation and economic stability increasingly intertwine Europe's industrial future and China's global economic engagement.

By preserving openness, strengthening industrial cooperation and resisting protectionist impulses, both sides can transform economic interdependence into a long-term foundation for mutual prosperity and global green development.

(If you want to contribute and have specific expertise, please contact us at opinions@cgtn.com. Follow @thouse_opinions on X, formerly Twitter, to discover the latest commentaries in the CGTN Opinion Section.)