China-Denmark Trade and Investment Relations: Key Developments and Opportunities

• In 2023, China became Denmark’s third-largest trading partner in Asia, with bilateral trade reaching US$10.2 billion. Particularly notable were Danish exports of industrial machinery, chemical products, and agricultural goods to China. Conversely, China exported electronics, computers, and textiles to Denmark.
• Both countries are focused on green energy and digital infrastructure, with Denmark’s expertise in wind power aligning well with China’s green transition goals.
• Denmark’s high-tech manufacturing, environmental engineering, and green energy solutions are vital to China’s evolving needs, while China’s large-scale market and industrial capacity offer vast opportunities for Danish companies.

In recent years, the economic partnership between China and Denmark has grown significantly, with bilateral trade reaching US$10.2 billion in 2023. This solidified China’s position as Denmark’s third-largest trading partner in Asia, reflecting the strong ties between the two nations. The trade flow encompasses a diverse range of sectors, from clean energy and technology to agriculture and manufacturing, underlining the broad scope of their cooperation.

As both countries share a commitment to sustainable development, China’s increasing investments in Denmark are driving innovation in renewable energy, green technology, and digital infrastructure. This partnership is further strengthened by Denmark’s expertise in wind energy and environmental solutions, aligning well with China’s goals to transition to a greener and more digitally advanced economy.

The growing trade and investment relationship between China and Denmark not only reflects mutual economic interests but also highlights the complementary strengths of each nation. Denmark’s high-tech manufacturing, environmental engineering, and green energy solutions are vital to meeting China’s evolving demands, while China’s large-scale market and industrial capacity offer vast opportunities for Danish enterprises. Together, these nations are paving the way for continued progress in sustainability, technological innovation, and economic growth.

China-Denmark key partnership and strategic initiatives

The China-Denmark relationship, which began in 1950, reached a new milestone in 2008 with the establishment of a Comprehensive Strategic Partnership. This agreement elevated their bilateral ties to a more structured level, emphasizing a long-term collaboration across a range of actors. It recognized their shared interests in tackling bilateral, regional, and global challenges, particularly in areas like trade, climate change, and sustainable development.

In 2017, the two countries took a further step to solidify their relationship by establishing a Joint Work Programme for 2017-2020. The program acted as a blueprint for bilateral cooperation, encouraging strategic dialogues and joint ventures between the two nations in key areas such as trade, investment, environmental sustainability, and technology

The partnership was further reinforced in November 2021, when the Foreign Ministers of China and Denmark announced the commitment to a new phase of cooperation through the Green China-Denmark Joint Work Programme. The agreement emphasizes the acceleration of green technologies, renewable energy, positioning Denmark’s expertise in clean energy and green innovation as a crucial asset in China’s drive toward a greener economy.

China-Denmark trade

Over the past five years, China’s exports to Denmark have shown consistent growth, further strengthening the economic ties between the two nations. This trend underscores their mutual commitment to expanding commercial relations and unlocking the potential for deeper cooperation.

China’s growing importance to Denmark, both as a market and as a supplier of production inputs, is evident in the economic integration over the last three decades. Today, China is Denmark’s fourth-largest export market, after the United States, Germany, and Sweden.

China is not only a major importer of Danish goods but also plays a critical role as a supplier of finished products and vital production inputs. This deep economic interconnection underscores China’s essential role in Denmark’s economy. Given this deep economic interconnection, Denmark’s National Bank has cautioned that any downturn in China’s economy could significantly impact Denmark’s growth. Such a slowdown would likely have far-reaching consequences, potentially not only reducing exports to China but also disrupting the supply chain of key production inputs for Danish industries.

Denmark’s exports to China

According to the United Nations COMTRADE database on international trade, Denmark’s exports to China were US$3.36 billion during 2023. The largest export category was machinery, nuclear reactors, and boilers, which accounted for US$704.5 million, highlighting Denmark’s strength in industrial engineering and technology. Exports of fish, crustaceans, and mollusks followed closely at US$497.5 million, reflecting the robust demand for premium seafood in China. Optical, photo, technical, and medical apparatus contributed US$449.88 million, showcasing Denmark’s expertise in high-precision and medical technologies. Meat, particularly pork, remained a major export at US$442.28 million, though it showed signs of decline compared to previous years due to China’s focus on self-sufficiency in this sector. Other notable categories included electrical and electronic equipment at US$205.49 million and pharmaceutical products at US$77.54 million, reflecting Denmark’s innovative approach to healthcare and industrial applications.

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In 2024, Denmark’s export dynamics evolved, shaped by China’s changing import demands and market conditions. While traditional sectors like machinery and seafood remained strong, there was a notable increase in demand for renewable energy components, such as wind turbine parts, highlighting Denmark’s critical role in supporting China’s green energy transition. The pharmaceutical sector experienced a slight decline in value compared to 2023, but specialized machinery for the environmental and food industries saw steady growth. Dairy exports, including butter and cheese, showed resilience, driven by China’s growing preference for premium, sustainable imports. However, meat exports, particularly pork, continued to decline, reflecting China’s ongoing efforts to boost domestic production.

China’s exports to Denmark

China’s exports to Denmark totaled US$8.16 billion in 2023, according to the United Nations COMTRADE database on international trade. The bulk of these exports were concentrated in industrial goods, with electrical and electronic equipment leading at US$1.32 billion. Other key contributors included machinery, nuclear reactors, and boilers valued at US$1.15 billion, and articles of apparel (not knit or crocheted) at US$558 million. These high-value exports highlight China’s strong manufacturing capabilities, particularly in technology, industrial machinery, and consumer goods, reinforcing China’s position as a global production leader.

The trade relationship between China and Denmark also reflects a diverse range of exports beyond industrial and technological sectors. Pharmaceutical products, valued at US$475 million, indicate steady demand for China’s health-related goods. The furniture sector, at US$532 million, demonstrates robust demand for affordable, well-crafted products. Additionally, the toys, games, and sports requisites category, valued at US$175 million, further emphasizes the growing consumer demand in Denmark for high-quality Chinese-made goods. These sectors underscore the diversity and expanding reach of China’s export economy to Denmark, spanning both industrial and consumer products.

From January to September 2024, China’s exports to Denmark exhibited a shift towards consumer goods and technology products. Key exports during this period included computers (US$43 million), non-knit women’s suits (US$31.5 million), packaged medicaments (US$31.3 million), railway cargo containers (US$26.8 million), and electric motor parts (US$25.4 million). These categories indicate a diversification from the heavy industrial focus seen in 2023.

China-Denmark investment

Denmark has made significant investments in China, particularly in renewable energy, green technologies, and high-tech industries. In 2023, Denmark’s direct investment in China reached US$364 million, reflecting new investments for the year. Notably, companies like Ørsted and Vestas have been at the forefront of China’s wind energy sector. At the same time, Chinese investments in Denmark—especially in renewable energy, technology, and infrastructure—have also increased, highlighting the growing economic ties between the two countries.

Denmark’s investment in China

Denmark has made significant strides in its investment activities in China, with a particular focus on renewable energy, green technology, and high-tech industries. In 2023, Denmark’s direct investment in China totaled approximately US$364 million, reflecting continued growth in key sectors such as renewable energy, machinery, and pharmaceuticals.

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A primary area of Danish investment is green energy, which aligns with China’s ambition to lead in renewable technologies. Companies like Ørsted and Vestas have expanded their operations in China, contributing to the country’s wind power capacity. Denmark is also a significant player in wind turbine technology, with Vestas being one of the largest foreign investors in China’s wind energy sector.

In terms of investment distribution, Denmark’s focus on sustainable energy solutions is clear. The country’s investments are strategically targeted at boosting China’s wind, solar, and green technologies, with plans to integrate clean technologies into the Chinese market further. Denmark’s role in China’s energy transition is further underscored by both countries’ commitment to the Green Joint Work Programme for 2023-2026, which aims to strengthen collaboration in renewable energy, environmental protection, and climate change efforts.

China’s investment in Denmark

Chinese investments in Denmark have surged in recent years, particularly in sectors such as renewable energy, technology, and infrastructure.

Similar to Denmark’s investments in China, Chinese investments in Denmark are also heavily focused on renewable energy, particularly in the wind energy industry. Notable Chinese companies such as China National Offshore Oil Corporation (CNOOC) and Goldwind have made substantial investments in Danish wind turbine companies like Vestas and Ørsted. In 2022, Chinese investments in Denmark’s clean energy sector were valued at approximately US$1.2 billion. Goldwind has invested in offshore wind projects in Denmark, while CNOOC has shown strong interest in Danish offshore wind farms.

Chinese investments in technology and infrastructure in Denmark are also on the rise. Huawei, for example, has invested in Denmark’s 5G infrastructure, playing a key role in Denmark’s digital infrastructure development.

Additionally, China’s interest in Denmark’s biotechnology and pharmaceutical sectors has been growing, with investments flowing into Danish biopharma companies. Notably, Chinese pharmaceutical giant Hutchison China MediTech has invested in Danish biotech company H. Lundbeck, a leader in neuroscience and mental health treatments.

Current business sentiment and future outlook

According to the Survey of Danish Companies in China, recent data reveals a more cautious outlook. An increasing portion of respondents express concerns about market dynamics and growth potential.

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Despite these concerns, the majority of Danish firms operating in China remain committed to their operations. About 68 percent of surveyed companies consider their activities in China crucial to their overall business success, with nearly half ranking China among their top two markets by turnover. This highlights the importance of maintaining a presence in China, even amidst economic uncertainties.

Optimism remains strong in certain sectors, particularly in relation to the green transition. 38 percent of Danish companies in China are confident that the evolving regulatory environment around sustainability will positively impact their future revenue. This optimism aligns with China’s ongoing efforts to achieve carbon neutrality by 2060, creating further opportunities for foreign investment in renewable energy and advanced manufacturing.

Looking ahead, half of Danish companies plan to increase their capacity in China within the next two years, with only eight percent expecting to reduce their operations. This shows a strong commitment to growth, despite the broader geopolitical and economic challenges. Many companies are adopting a China Plus One strategy, diversifying their investments in other Asian markets to mitigate risks.

These shifts illustrate how firms are recalibrating their approach as they navigate a complex and shifting business environment in China.

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