How China’s Investments Are Reshaping Europe’s Economic Independence
In October 2025, the Dutch government invoked the rarely used Goods Availability Act to take effective control of Nexperia, a semiconductor company based in Nijmegen but owned by China's Wingtech Technology. This unprecedented move has sparked a geopolitical standoff, raising critical questions about China's growing footprint in Europe's strategic sectors.
🇨🇳 China’s Strategic Acquisitions: A Pattern of Influence
China's approach to foreign direct investment (FDI) in Europe has been marked by a focus on critical infrastructure and advanced technology sectors. According to the European Parliament, China's footprint in European critical assets has grown steadily over time, without any centralized mechanism that could give the European Union (EU) and Member State agencies visibility and scrutiny over projects of strategic significance for Europe’s defense and security. This poses specific challenges to Europe’s efforts to protect its critical infrastructure. European Parliament
In 2023, Chinese FDI in Europe rebounded, with a significant portion directed towards the electric vehicle (EV) sector. Hungary emerged as a top destination, receiving 44% of all Chinese FDI in Europe, benefiting from the surge in EV investments. Rhodium Group
🏭 Nexperia: A Case Study in Strategic Control
Nexperia, a key supplier to Europe’s automotive industry, was acquired by Wingtech in 2019. The company's strategic importance was underscored when the U.S. Department of Commerce added Wingtech to its Entity List in December 2024, citing national security concerns. Subsequently, the Dutch government took control of Nexperia, removing its Chinese CEO, Zhang Xuezheng, and replacing him with Dutch businessman Guido Dierick. This intervention was driven by concerns over governance issues that could threaten Dutch and European technological sovereignty. Financial Times+1
In retaliation, China imposed export controls on Nexperia, prohibiting the company and its subcontractors from exporting specific finished components and sub-assemblies manufactured in China. Nexperia is actively engaging with the Chinese authorities to obtain an exemption from these restrictions. Nexperia
🔍 Comparative Analysis: China vs. Japan vs. USA
Country | Investment Focus | Strategic Motive | Dependency Outcome |
🇨🇳 China | Critical infrastructure, technology, EV supply chains | Strategic control, supply chain dominance | Structural dependency |
🇯🇵 Japan | Manufacturing, industrial efficiency | Productivity & cooperation | Mutual growth |
🇺🇸 USA | Markets, consumers, services | Market access & innovation | Digital dependency |
China's investments often target sectors that are vital to national security, such as semiconductors and energy infrastructure. This approach contrasts with Japan's focus on manufacturing efficiency and the USA's emphasis on market expansion and innovation. China's strategy aims to integrate host countries into its economic orbit, creating long-term dependencies.
🛡️ Europe's Response: Balancing Openness and Security
The EU has recognized the need to balance openness to foreign investment with the protection of strategic assets. The European Commission continues to be a driver of FDI screening across the EU, encouraging member states to adopt and adapt their regimes, and to move toward coordinated enforcement. White & Case LLP
The Dutch intervention in Nexperia is part of a broader trend of governments reversing foreign acquisitions due to national security tensions. This move reflects Europe's struggle to maintain technological sovereignty while remaining open to foreign investment.
🔮 Conclusion: A Wake-Up Call for Europe
The Nexperia case serves as a stark reminder of the complexities surrounding foreign investments in critical sectors. While foreign capital can drive economic growth, it can also lead to strategic vulnerabilities if not carefully managed. Europe's challenge lies in finding a balance that allows for economic openness without compromising national security.
As China continues to expand its influence through strategic investments, European nations must develop robust frameworks to assess and manage the risks associated with foreign ownership of critical infrastructure. The Nexperia incident underscores the need for vigilance and proactive measures to safeguard Europe's technological and economic independence.
Comments