The EU is the world's largest exporter of international investment as well as the leading recipient of FDI in the world, with a traditionally open-door policy to FDI. The current 28 EU member states account for almost 50% of all investment agreements concluded worldwide. The EU is an open space committed to free trade and investment. And now, since the entrance into force of the Treaty of Lisbon, it has become a major actor in international investment law.
At various points in European history, there have been surges in direct investors from particular countries. This certainly creates fear among the local competitors and may create some unrest in the government in certain cases. Such surges occurred in the 1960s with US firms and in the 1990s with Japanese and Korean investors. However, in recent years, perhaps because of the economic crisis that many European countries have suffered, the EU is once again becoming a favoured destination for FDI, especially from the PRC.
In this most recent surge, fresh capital has been welcomed, especially if it means saving or creating jobs in a very difficult period for many European countries. So far, the climate for Chinese investments has been better in Europe than in the US, and there have been no particular administrative difficulties or no political quarrels. As a consequence, Chinese FDI has increased steadily, and over the past decade all kinds of iconic brands have been acquired by Chinese firms: fashion houses like Aquascutum of London or Sonia Rykiel of Paris, crystal makers like French Baccarat, car producers like Swedish Volvo, food brands like British Weetabix breakfast cereals, or wine producers like the French Gevrey-Chambertin wine from Burgundy.
However, this situation seems to be starting to change. Despite the fact that Chinese investment in the EU started from a low base and that the total value of the investments is still limited. Concern is growing across Europe about important sectors of the European economy potentially coming under foreign control, especially of the PRC. Chinese investments in the EU rose 77% to over € 35 billion in 2016. Although FDI from the PRC remains small in absolute numbers, it is deeply linked to the state and this triggers fears about politically driven FDI and the potential acquisition of key sectors of the European economy, among others.