• The most prominent industries are transport and logistics platforms, as well as the industrial, consumer and retail, infrastructure and engineering, and energy sectors. • Chinese investors see the quality of life, market size and infrastructure as strengths in Spain’s favour. • 60% of Chinese companies see Spain as a positive environment for innovation.

To mark the 50^th anniversary of diplomatic relations between China and Spain being restored, the “Chinese FDI in Spain: Global Outlook 2023” study, drawn up by ICEX-Invest in Spain in collaboration with KPMG in Spain, was presented this Tuesday at the ICEX Auditorium. This study took into account responses collected from 80 Chinese-owned companies with registered offices in Spain, as well as interviews with eight executives from these companies.

In the face of the obvious challenges arising from an economic and geopolitical context marked by inflation and restrictive monetary policies, Chinese companies are remarkably optimistic about the economic context in Spain, improving their position vis-à-vis the rest of Europe. 

Elisa García, Executive Director of ICEX-Invest in Spain, stated that “Spain is a country that is open to foreign investment. According to the OECD's FDI Regulatory Restrictiveness Index, Spain is the ninth least restrictive OECD country for investment from a regulatory point of view.”

Respondents also rated Spain’s business environment as positive. Thus, the quality of life, the size of the local market, access to other markets (particularly the European Union), infrastructure, the integration of expatriates, logistics platforms and the availability of highly trained professionals are essential for successfully implementing various business activities.

Bilateral relations at an institutional level are an issue that has seen special focus, with the executives surveyed considering that institutional ties are conducive to attracting investment to Spain. Moreover, the regulatory framework, in addition to being highly rated, received very positive feedback when compared to that of other EU Member States.

The study reflects great diversity in terms of turnover as well as in the size of companies of Chinese origin. 30% of the companies do moreover sell all their products and services in the Spanish market. In terms of R&D investment, 34% of the companies surveyed report that they have invested in this area.

For the companies surveyed, Spain stands out as an epicentre of digital transformation, innovation and ESG focus – aspects that Chinese companies are recognising and actively adopting in their strategies.

The companies
65% of the companies surveyed set up their headquarters in Spain in the decade 2010-2020. The predominant types of companies established are subsidiaries, branches and M&A, as well as other forms. This therefore demonstrates Chinese companies’ serious and long-term commitment to the Spanish market.

David Höhn, Partner Responsible for China Practice at KPMG in Spain, explained that “Chinese companies have become key players in many sectors of the Spanish economy, such as transport or the industrial sector. This is due to their great contribution to economic development and job creation, as well as the good relations between China and Spain, which have gained great importance over the past decade.

Of the Chinese companies established in Spain, almost seven out of ten did as a result choose the Community of Madrid (65%) as their preferred city to carry out their business, followed far behind by Catalonia (18%). The transport industry and logistics platforms do in addition stand out with respect to industrial, consumer and retail, banking and insurance, infrastructure and engineering, technology, energy and telecommunications sectors, as well as other areas of business.

In terms of exports, it is worth noting that most Chinese companies export their production outside Spain. On the other hand, it was found that 30% of them sell their products and provide their services exclusively in the Spanish market. 35% of companies do in addition export less than 25% of what they produce.

It should also be highlighted that, for both Chinese and Spanish managers of these multinational organisations, effective intercultural management and talent retention are the cornerstones of business success in Spain.

---------------------------------------------------------------------------------------------

The study was published in English and is available on the ICEX-Invest in Spain portal