A study published Tuesday by consultancy EY shows that China's mergers and acquisitions in Europe dipped by 21 percent last year with a total of 196 M&A deals registered in 2018.

In Germany alone, the number of investment deals sank from 54 to 35 last year.

The decline in Chinese investment activities on the continent was particularly dramatic in the second half of 2018 when the number of acquisitions decreased by 26 percent, and the number of investments in Germany plunged by a staggering 60 percent.

There were only 10 Chinese transactions in Germany in the final six months of last year, with the number of takeovers hitting low levels last seen in the first half of 2013.

Is the falling number of acquisitions reflected in investment volumes?

Pretty much yes. Overall Chinese investment volumes in Europe last year tanked by 46 percent to reach $31.2 billion (€27.3 billion).

Roughly one-third of that money flowed to Germany where the Chinese invested $10.7 billion, marking a 22 percent decline.

China's biggest deal in Germany was also China's largest investment Europe-wide, notably the estimated $8.7 billion investment by carmaker Geely in German auto manufacturer Daimler.

What are the primary reasons for the investment lull?

The reasons for the slowdown are manifold. While heightened security concerns in the West and fears of a sell-out of crucial industries have played a significant role, there are other factors that have contributed to the recent trend reversal.