The number of deals between China and Europe has fallen dramatically over the last two years, according to a report from the European Commission that indicates there are still governments that haven’t implemented increased screening of foreign deals and investments, reports Bloomberg. While 24 nations either have rules in place or are working on them, three EU member states—Bulgaria, Croatia and Cyprus—haven’t revealed any legislation to scrutinize outside investments.
China’s merger and acquisition transactions in Europe fell 63% in 2020 from the previous year and made up just 2.5% of all deals compared to 4% the previous year, the report said. The decline seems to be independent of the pandemic, since it started in November 2019, two months before the first COVID-19 restrictions, and hasn’t picked up significantly as economies opened up again. China is the fourth biggest source of M&A for the region, far behind the US, UK and Switzerland.
EU governments have been showing concern over Chinese investment for several years, prompting rules that require foreign investors to notify deals or projects that might touch on sensitive areas such as defense or crucial technology. Germany blocked a Chinese bid for a machine-tool firm in 2019.