What makes Real Estate Capital Flows: The case between China and the EU

International capital flows is a very common phenomenon of economic globalization and it plays an important role on promoting the world economy development rapidly. From the 90s of the 20th century, a large number of foreign investments poured into China, they made an important contribution to the China’s economy growth. By contrast, China’s foreign investments were kept the lower level during the same period. However, China’s foreign investments were rising obviously in recent years, and it has become an important component of Chinese government strategies. In 2015, the capital flows of global FDI were 1.47 trillion US dollars, and China’s FDI was 145.67 billion US dollars, it set a new record and the year-on-year growth raised 18.3%. The capital flows of China’s foreign investment exceeded Japan and became the world’s second largest foreign investor in 2015. China’s foreign investments are covering more than 188 countries and regions nowadays. At the end of 2015, the real estate industry investment was 33.49 billion US dollars, accounted on 3.1% of China’s FDI stock. The EU is the largest source and destination of FDI in the world measured by stocks and flows. On 21 November 2013 EU-China both sides announced the Launch of negotiations of a comprehensive EU-China Investment Agreement. The Agreement will provide for progressive liberalization of investment and the elimination of restrictions for investors to each other’s market. Investment flows between the EU and China also show vast untapped potential, especially when taking into account the size of our respective economics. China accounts for just 2%-3% of overall European investments abroad, whereas Chinese investments in Europe are rising. By the end of 2015, the total volume of EU’s direct investment into China was $103.14 billion. In 2015, the 28 EU countries’ actual investments into China was $6.51 billion, up 4.6% from a year earlier; China’s FDI into EU was $64.46 billion by the end of 2015, accounted on 5.9% of China’s total foreign investments stock. In the mainly invest industries that China invested into EU in 2015, real estate investments stock was $2.98 billion, accounted on 4.6% of China’s total investment stock.And this paper will select several important factors that determine real estate capital flows between the EU and China and use model to analyze them.