Comparative advantages

Spain has the potential to become a center for cooperative projects that combine European and Chinese capabilities for the benefit of third-country markets

The development of Spain-China economic cooperation has become one of the most significant phenomena in Europe. According to China's Ministry of Commerce, bilateral trade between China and Spain exceeded $55 billion in 2025, growing nearly 10 percent year-on-year. The trade structure continues to improve, with a rising share of high-tech and high-value-added products. Two-way investment stock has reached nearly $11 billion.

This reflects a transformation far deeper than a simple increase in foreign capital and trade inflows. Rather, it represents a structural shift in the way international companies organize their value chains, determine the location of production facilities and design their strategies for accessing major regional markets. In this context, Spain has evolved from being a secondary destination for Chinese investment into one of Europe's leading hubs for projects linked to the energy transition, sustainable mobility and advanced industrial technologies.

In recent years, leading Chinese companies operating in strategic sectors have announced major investments across Spain. The partnership between Chery Automobile and Ebro-EV Motors to revive the historic Barcelona manufacturing plant stands as one of the most visible examples of this new industrial phase. It is complemented by projects led by companies such as CATL, Envision, Hithium, Trina Solar, Hygreen Energy and Hunan Yuneng, focusing on battery manufacturing, electric vehicle components, green hydrogen and photovoltaic solar energy for the ecological transition.

These investments are not driven solely by the search for new markets. Spain offers a particularly attractive combination of competitive advantages: a strategic geographical position connecting Europe, Africa and Latin America; a modern logistics network; world-class energy infrastructure; substantial renewable energy generation capacity; a highly qualified workforce; and full membership in the European Union's single market. Together, these factors make Spain an ideal industrial platform for supplying the entire European market.

The potential benefits for the Spanish economy are evident. The arrival of international capital stimulates the creation of highly skilled employment, facilitates technology transfer, strengthens local supply chains and contributes to the reindustrialization of the regions that have experienced years of industrial relocation. Moreover, many of these investments are concentrated in sectors identified by the EU as strategic priorities within its decarbonization agenda, energy autonomy objectives and digital transformation policies.

At the same time, the expansion of Chinese corporate presence has sparked an intense political and strategic debate within the EU. European institutions have progressively strengthened mechanisms for screening foreign investments in sensitive sectors, particularly those involving critical infrastructure, advanced technologies, artificial intelligence, telecommunications, defense, energy and data management.

Among the principal issues are the risk of excessive dependence on supply chains supported by various foreign companies, the competitive implications of differing models of industrial development, different standards of market access and the need to preserve each side's strategic autonomy in technologies regarded as essential for their future economic prosperity and security.

Nevertheless, interpreting this phenomenon solely through the lens of geopolitical rivalry would lead to an incomplete analysis. The international economy is undergoing a profound transformation characterized by the gradual emergence of a multipolar world, where economic relations are increasingly built upon shared interests, industrial complementarities and technological cooperation rather than traditional ideological alignments.

Growing economic interdependence means that even the world's leading powers continue to maintain extensive commercial relationships despite political differences. China remains one of the EU's largest trading partners, while Europe continues to represent one of the most important markets for Chinese enterprises. This reality requires the development of policies capable of balancing economic openness, the protection of strategic interests and international cooperation.

Within this framework, particular attention should be given to a white paper, titled "More Just and Equitable Global Governance: China's Principles, Proposals and Actions" released by China's State Council Information Office, which advocates a global governance vision characterized by extensive consultation, joint contribution and shared benefits.

Regardless of the different political interpretations this proposal may generate, it undeniably reflects an increasingly visible trend in global governance: the search for cooperative mechanisms capable of addressing shared challenges such as climate change, the energy transition, artificial intelligence, food security, public health and the resilience of global supply chains.

Spain possesses particularly favorable conditions to play a significant role within this evolving international landscape. Its strategic geographical position, active membership in the EU, extensive international business experience, and deep historical, cultural and economic ties with Latin America place it in a privileged position to serve as a bridge connecting Europe, China and the broader Ibero-American region.

This role can extend far beyond merely attracting foreign investment. Spain has the potential to become a center for technological cooperation, industrial innovation, joint research, specialized education and the development of international business projects that combine European and Chinese capabilities for the benefit of third-country markets.

Particularly promising areas include renewable energy, the green economy, electric mobility, industrial digitalization, artificial intelligence applied to industry and services, biotechnology, the circular economy and traditional Chinese medicine integrated into international health and wellness initiatives. In many of these sectors, there are clear complementarities between China's technological capabilities, Europe's regulatory expertise and the international reach of Spanish companies.

Naturally, this process requires a balanced regulatory framework. Taking advantage of the opportunities created by Chinese investment is fully compatible with protecting Europe's strategic interests. Achieving this balance requires reinforcing principles such as reciprocity in market access, corporate transparency, intellectual property protection, legal certainty, fair competition and compliance with EU rules governing state aid and public procurement.

Experience also demonstrates that international economic relations often prove more stable than political cycles. Across both Europe and Latin America, governments with differing ideological orientations have maintained — and in many cases expanded — their economic relations with China whenever doing so served their national interests in development, investment and economic growth. Economic pragmatism frequently prevails over political differences when mutual benefits are clearly identifiable.

Ultimately, the challenge is not to choose between Europe and China, but to build a mature relationship capable of strengthening European competitiveness while embracing the opportunities offered by one of the world's largest economies. Economic cooperation does not necessarily imply dependence, just as protecting strategic sectors should not be confused with indiscriminate protectionism.

Chinese investment in Spain therefore represents far more than an international movement of capital. It constitutes a visible expression of the new global economic balance that is taking shape throughout the 21st century. Managing this transformation successfully will require strategic vision, institutional intelligence and an economic policy capable of reconciling openness, security and competitiveness.

The author is the president of the European Foundation of Traditional Complementary and Integrative Medicine (FEMTCI) and the vice-president and the secretary general of the Fundación Cátedra China, Spain.

The author contributed this article to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.

Contact the editor at editor@chinawatch.cn.