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M&A monitor

China, sanctions and overseas investment

Before the recent escalation of the sanctions row between China and the West, there were rumors of Chinese companies eyeing European tech assets after a relatively quiet period for inbound deals. 

person and computer chip

Chinese investment in European tech has dropped dramatically since its peak in 2018

Their renewed interest followed the conclusion of talks late last year over the EU/China investment agreement, the ratification of which (according to EU trade commissioner Valdis Dombrovskis) now hinges on how the diplomatic dispute between Brussels and Beijing unfolds. If the deal is approved - by no means certain following China's imposition of sanctions on members of the European Parliament - there is nothing in it that stops member states using their existing powers to block prospective Chinese investments on national interest grounds. But given the delicate diplomatic situation, it will be interesting to see what impact future decisions of this kind will have on general trade relations between the two sides.

If you’re interested in reading about the fast-evolving world of foreign investment regulations, we’re launching a quarterly Foreign Investment monitor dedicated to the topic in a few weeks’ time. If you’d like to receive the report, please speak to your usual Freshfields contact.