by Zhao Xiaopeng

EY reports released at CIFTIS show project numbers rising in parts of southern, central and eastern Europe and in strategic industries while Chinese business districts build services for companies expanding overseas.

BEIJING, Sept. 12 (China Economic Net) — Foreign direct investment projects in Europe fell 7 per cent last year, but the number of artificial intelligence projects almost doubled and Türkiye, Poland and Spain recorded gains as project numbers declined in France, the UK and Germany, the EY European Attractiveness Survey showed.

According to an EY press release, the survey was presented at the China International Fair for Trade in Services in Beijing on 11 September. It recorded 5,026 cross-border investment projects across 47 European countries in 2025. The projects were associated with 202,186 announced jobs, down 25 per cent from the previous year.

The overall decline concealed a sharp divergence. France remained Europe’s largest destination with 852 projects, followed by the UK with 730 and Germany with 548. Yet their totals dropped by 17 per cent, 14 per cent and 10 per cent respectively.

Further south and east, Türkiye attracted 383 projects, up 20 per cent. Spain’s total rose 7 per cent to 376, while Poland gained 10 per cent to 285. EY attributed the shift to lower labour costs, available industrial land and European Union funding that has unlocked infrastructure investment in parts of southern, central and eastern Europe.

Traditional centres faced a different mix of pressures. Political and fiscal uncertainty weighed on France, while trade friction and higher business costs hurt sentiment towards the UK, the report found. In Germany, a manufacturing slowdown caused by weaker demand from China and energy cost pressures reduced investment across industrial supply chains.

The sectoral map changed even faster. AI-related projects surged 96 per cent in 2025, creating more than 14,000 jobs, while defence projects grew 84 per cent to 107 projects, more than half of them in manufacturing.

In a press release accompanying the reports, Yu Yan, a consulting partner at EY Greater China, said energy and sustainability, strategic autonomy and critical industries had long been priorities for Europe. Looking ahead, “Investors were placing greater emphasis on geopolitical stability and policy predictability, while artificial intelligence was becoming an increasingly important factor in European investment decisions,” she said.

Low-carbon energy projects increased 25 per cent, while automotive projects declined 11 per cent. The mix favoured industries that Europe regards as central to technological capacity, energy security and strategic autonomy.

Near-term caution has not erased longer-term confidence. In EY’s survey of 500 international executives, 54 per cent planned to establish or expand operations in Europe over the following year, down from 59 per cent in the previous survey and 72 per cent two years earlier. Even so, 60 per cent expected Europe’s attractiveness to improve over the next three years.

Investors valued the size of Europe’s market, its infrastructure and its research base. They were less positive about costs and the regulatory and administrative environment. Geopolitical tensions were the most frequently cited risk, selected by 41 per cent of respondents, followed by macroeconomic conditions at 35 per cent.

Tariffs and other trade barriers were cited by 27 per cent, with regulatory complexity and better incentives offered elsewhere each cited by 25 per cent.

As Chinese companies navigate an increasingly complex overseas investment landscape, a second EY report released at CIFTIS turned the focus back home, examining how China’s central business districts can better support companies expanding abroad.

The report proposed a draft assessment framework comprising eight dimensions — talent, market proximity, influence, external conditions, office space, consumption vitality, innovation and sustainability — and 83 indicators. It said no related data collection had been conducted at this stage and that the framework was intended to support future formal assessments.

Yu said EY hoped the report would provide a new tool for assessing the development of China’s business districts, benchmarking their performance and identifying areas for improvement. “We hope it will help transform the development experience of Chinese business districts from individual practices into replicable and scalable frameworks, while giving them a stronger voice internationally,” she noted.

Among its six principal findings, the study said Chinese business districts were moving from expansion in scale towards higher-quality development and broadening their industrial base beyond finance and trade to include digital and other emerging sectors. It also identified a shift from a largely one-way role in attracting foreign investment towards two-way services that support both overseas companies entering China and Chinese businesses expanding abroad.

The report said districts in Shanghai, Shenzhen and Sanya were increasingly hosting regional headquarters for outbound businesses, cross-border operating centres, treasury centres and investment platforms. Companies working across multiple jurisdictions needed support in areas including policy and compliance, legal and tax affairs, fund management, cross-border data, multilingual professional services and overseas networks, it added.

Lujiazui in Shanghai was cited for developing a digital outbound-services base to support the overseas expansion of Chinese technology, content, standards and products. The project is one of Shanghai’s first pilot platforms for digital services supporting international expansion, according to the study.

In Guangzhou, the Tianhe central business district had assembled about 20,000 digital-service companies, based on public information cited in the report. Citing local public information, the report presented Beijing’s central business district as a mature international business cluster hosting more than half of the city’s regional headquarters of multinational companies and about 300 foreign-licensed financial institutions.

The report also described a broader geographic role for business districts in China’s opening-up. It called on leading districts to extend co-operation to emerging markets, including ASEAN and BRICS countries, and to pursue institutional innovation in digital trade, green finance and cross-border data flows.

To support two-way investment, the study recommended stronger international networks for legal, financial and information services, alongside specialised platforms for cross-border operations. It said these functions would enable Chinese business districts to serve foreign companies investing in China while providing domestic companies with the professional services required to operate in overseas markets.