Move Over, Hungary: Spain Is China’s New Best Friend in the EU

Why It Matters

Spain’s deepening ties give China a powerful, mainstream voice in EU policy, reshaping trade, technology, and security dynamics across Europe.

Key Takeaways

• China's investment in Spain rose 50% to $3 billion (2024‑25)
• Spanish firms host Chinese battery gigafactory in Zaragoza, creating jobs
• Spain signed quantum partnership with Origin Quantum, Europe's largest computer plan
• CATL to bring 2,000 Chinese workers for Barcelona plant
• Huawei awarded Spanish wire‑tap storage contract, sparking EU cybersecurity concerns

Pulse Analysis

The geopolitical balance in the European Union is shifting as Spain replaces Hungary as Beijing’s preferred ally. Sanchez’s annual trips to Beijing since 2023 and the Spanish king’s 2024 delegation have cultivated a climate of openness to Chinese capital, contrasting sharply with the isolation Hungary faced after Viktor Orban’s fall from power. This diplomatic realignment is underscored by a 50% jump in Chinese direct investment to about $3 billion, a figure that, while still below Hungary’s $5.2 billion, signals Madrid’s growing appetite for state‑backed projects that bypass EU tariffs on electric vehicles.

Madrid’s economic strategy centers on high‑tech and green sectors, with Chinese firms establishing a battery gigafactory in Zaragoza, a Chery R&D hub in Barcelona, and a pending wind‑turbine deal with Ming Yang after the UK blocked the investment. The quantum‑computing agreement with Origin Quantum aims to build Europe’s largest quantum computer, positioning Spain at the forefront of emerging technologies. However, these ventures raise labor and security concerns: CATL plans to import 2,000 Chinese workers, and Huawei’s contract to store judicial wire‑taps has triggered scrutiny under the EU Cybersecurity Act. Critics argue that such arrangements give Chinese state‑subsidized firms an unfair competitive edge and risk compromising European data integrity.

For the EU, Spain’s alignment with Beijing complicates a unified stance on China. While Germany, France, and the UK tighten export controls on emerging tech, Madrid pursues cooperation, even opposing EU tariffs on Chinese EVs. Sanchez’s influence in the European Council—bolstered by Spain’s status as the fourth‑largest EU budget contributor and its rapid economic growth—means Beijing now has a credible advocate capable of shaping policy from within. The partnership could accelerate China’s market penetration in Europe, but it also forces EU policymakers to reconcile trade benefits with strategic autonomy and security safeguards.