Table of contents

Abstract………...…………………………….……………………………………………..…3
Introduction…………………………………….……….…………...………………………...4
Literature review…………………………….…………...……………………………………5
Methods………………………………………..……………………..………………………..6
Expected Outcomes…………………..………………………..……………………..………10
References………………………………………………………...……………….…………11
 Abstract

It has been noticed that Chinese investment into the territory of the European Union
has increased significantly and that, in turn, has raised EU regulators’ concerns regarding the
public security of the EU. Today, China has the largest economy in the world by a number of
indicators, which means that the government of this country can use economic measures to
achieve its political goals. The number of investment projects of the PRC in the EU countries
has increased over the specified period, and China is a key investor for a number of European
countries. However, the attitude of European countries to Chinese investments is quite
ambiguous. The purpose of this research is to determine the importance of China's investment
projects in the EU as a factor in relations between European countries and China. This study
uses content analysis of data on the issue of FDI impact on the European market. It is
expected that the study will provide the research community with more detailed information
about the essence of Chinese investment projects and their influence on the European market.

Key words: China, EU, FDI, investment projects, impact, economy, market.
 Introduction

The recent years showed a sudden rise of Chinese influence in foreign direct
investments (FDI) in the European Union. There was a drastic increase of Chinese FDI
inflows into the EU in 2016, which led to concerns among European countries. In general,
economic and security concerns linked to FDI may be addressed through EU competition law
at EU or Member State level and/or with FDI screening procedures on national security
grounds, if any, at Member State level. While southern Member States accept the essence of
FDI, the European Commission maintains a much stricter scrutiny in such matters. In recent
years, major Chinese acquisitions have touched “essential interests” of the EU including:
technology, infrastructure and national security.

The chronological framework is due to two events: the beginning of the "One Belt,
One Road" strategy in 2013 and a significant cooling of Sino–European relations, which
occurred in 2022, due to the adoption of a response strategy to the Chinese initiative by the
G7 countries, as well as calls to tighten foreign policy towards China, by leaders of the EU
and individual countries.

Thus, it can be said that from one point of view, European countries want to get
Chinese investments, as they accelerate their economic development and contribute to the
renewal of their infrastructure, but at the same time, Chinese investment projects make EU
countries dependent on China, which may threaten their independence

The purpose of this research is to determine the importance of China's investment

projects in the EU as a factor in relations between European countries and China.

In order to achieve the research goal, a lot of Russian, English, Chinese and other foreign
sources, including quantitative data, will be used. The results of the conducted research can
be useful to people investigating the topic of Chinese influence in the international market
sphere.
 Literature review

Chinese businesses have substantially increased and diversified their direct

investment in Europe, seeking both large-sized acquisitions of strategic infrastructures as well
as smaller investments aimed at acquiring cutting-edge technological know-how. Part of this
trend is driven by Chinese private investors looking for opportunities outside China, as the
country has seen some recent volatility. Others are driven by priorities set by Beijing. This
includes the State strategy of ‘China 2025’ which aims to transform the nation into a high-
end manufacturing power within the next decade. Chinese economic and trade policies are
characterised by several strategies for development where state-driven investments have
enabled China to become a global player in economic terms. These encourage Chinese
enterprises to invest abroad, especially in strategic sectors (e.g. energy, telecom and railway
systems), with StateOwned Enterprises (SOEs) benefitting from Chinese public financing.
This can distort competition notably in the EU’s internal market as China’s SOEs are not
subject to EU’s state aid rules. The EU is committed to ensuring that there is a level playing
field for EU companies that have to compete with Chinese companies. From the perspective
of China, investing in Europe responds both to economic and to political imperatives, though
it may also bear political costs. This section explores how outward FDI in Europe has notably
enabled Chinese firms to acquire technology and know-how, enhance 7 their reputation
through the brand recognition of their acquisitions, and establish a logistical foothold in one
of the world’s largest consumer markets.

At the moment, the problem under research has been studied quite widely, although it
may be problematic to find the necessary information for certain specific moments. An
important strand of IPE literature studying the determinants of countries’ FDI openness
emerged in the past two decades (for a review, see Pandya, 2016). This body of literature
provides evidence that FDI openness is largely a result of rational choices by different players
in the world economy.

On the one hand, there are a lot of books and types of literature that describe Chinese
investments in other countries, and the importance of China's investment projects for
individual countries and regions. The problems of this work are consecrated by numerous
scientific works of researchers from such fields as economics, political science, the sciences
of international relations and other social disciplines in a variety of languages. Among the
Russian researchers of this problem, it is worth highlighting the works of A.V. Kuznetsov,
N.Yu. Senyuk, I.V. Andronov and D.S. Sokolan, which are aimed at studying China's direct
investments, as well as the work of E. V. Davydenko and T. V., Kolesnikov dedicated to the
implementation of the "One Belt, One Road" initiative within the framework of Russian–
Chinese cooperation. Among the foreign authors, it is worth highlighting the works of Sophie
Meunier, a researcher in the field of public and international relations at the School of Public
and International Relations at Princeton University. In one of his works, released in 2019, this
author studies the contradictions between economic opportunities and the political
consequences that Chinese investments have for Europe, and in another he concentrates
entirely on studying the negative consequences of Chinese investments in European
countries. Noteworthy works of Western researchers also include the work of Jacob Funk
Kierkegaard, devoted to the study of the decline in Chinese investment in European
countries, as well as an article by Maria Hake, aimed at studying the growing economic
dependence of the Balkan countries on China.

On the other hand, when the problems affect specific cases or events, the impact of
investment projects of the PRC on individual countries, it can be problematic to find suitable
literature or academic sources. For example, Chinese investments in some countries and
regions, such as Africa, have been studied in a large number of foreign and domestic works
analyzing the implementation of investment programs, as well as potential consequences.
However, for other countries, full-fledged studies may not exist, especially if these countries
occupy a modest role in the global economy (for example, Cyprus) and are not a priority for
China, as part of its investment strategy. However, there are such works, among them it is
worth highlighting an article by the Chinese researcher Jiuzhou Duan, dedicated to the impact
of the implementation of the Belt and Road strategy on Cyprus and Greece.

It is worth noting that in scientific research related to this issue, it is necessary to rely
not only on academic sources, but also on real facts, official statistics, if there is access to
such, and general expert assessment. The list is not limited only to these works, new research
is constantly appearing in the academic field of studying the investment policy of the People's
Republic of China, its impact on the world economy and international relations in general, as
well as studying this policy as a factor in relations between China and other countries,
including EU members.