China More Interested in Europe Than in the US

It seems that the financial crisis does not prevent China from relying on Europe. In contrast to recent information — usually from American sources — suggesting an incoming collapse of the Chinese economy, for the first time in its history, according to a study by the Chinese Investment Fund, A CAPITAL, Beijing invested much more money in Europe than across the Atlantic in 2011. Of the $68 billion (51.7 billion euros) in Chinese direct investments abroad, 44 percent have served mergers/acquisitions. Of these, 34 percent ($10.4 billion) went to Europe. The U.S. dropped to second place, with only 21 percent of the amount of investments made by the Chinese internationally in 2011, compared to 34 percent in 2010.

China, according to the study, seeks to diversify its investments and trade, the priority being given to high-tech businesses unlike past years when the emphasis was put on the acquisition of natural resources and raw materials, which are crucial to its economy. Nonetheless, this orientation remains the same today (51 percent of the total investments made in 2011), but in Europe, the Chinese interest groups are focused on sectors like chemistry, high-tech industries and services. In 2011, one of the most important investments in Europe was carried out in France, where the China Investment Corporation, China’s sovereign wealth fund, has taken over 30 percent of the exploration and production business of the group GDF Suez for the sum of $3 billion. More and more Chinese private companies have engaged in the investment offensive abroad. Although at the beginning of this year they had only 28 percent of the business concluded by China (compared to the 72 percent made by the state), the tendency of Chinese private enterprise investments to grow abroad is evident. Giving a global figure for last year, A CAPITAL specifies that the investments abroad have been worth $322 billion and predicts that they are to rise — up to 2016 — to nearly $800 billion.

The Chinese Have Become the Top Foreign Investors in Germany

In 2011, the Chinese have exceeded the Americans, the Swiss and the French to become the top foreign investors in Germany, announced the Germany Trade and Invest (GTAI) agency, which is responsible for promoting the country to foreign investors. The Chinese, reveals Les Echos, have invested in 158 projects currently listed by the GTAI, the Americans in 110 projects and the Swiss in 91. French investors, the neighbors considered the “favorite” partners of their German friends, are barely in fourth place with investments in 53 projects promoted by GTAI. It should be mentioned that, on the Continental level, Europeans still make up half the percentage of investors in Germany. One project in five has been in the machine industry or in the automotive industry; 13 percent have been in new technologies. Alternative energy investments were only 6 percent of the projects promoted by GTAI.

The Preferred Fields of the Chinese

Generally discreet, Chinese industrial groups have become the subject of discussion in recent weeks after it had been revealed that they have purchased numerous German businesses of high repute. These are smaller companies but are nonetheless dominant on the world market in their respective sectors. The latest acquisition, which received great publicity, has been carried out by the Chinese group Lingyun. It bought the German company, Kiekert, a small-and-medium-sized enterprise, but still considered number one worldwide in the production of car latches with great success in exports. The powerful Lingyun, an appendant manufacturer of the automotive industry with 10,000 employees worldwide and an annual turnover of more than 700 million euros ($921.83 million), has purchased Kiekert (which, in turn, has 4,000 employees in Germany, the Czech Republic, the U.S., Mexico and the People’s Republic of China) as well as 850 patents, for a sum still undisclosed. The German business, with nearly a century behind it, is located in the Ruhr area. In order to assess just how good a deal the Chinese group made, it should be mentioned that in 2011, Kiekert had a turnover of 500 million euros ($658.45 million).

At the end of January, another successful transaction on the part of the Chinese was announced. The group Sany purchased the German group, Putzmeister, one of the country’s major suppliers of construction equipment, for the sum of 500 million euros ($658.45 million). The examples above are only from the year 2011, but if we recap the big investments/acquisitions from Greece, Portugal, other investments in France, Germany and countries of Central and Eastern Europe, we would find the reasons for which the French publication L’Expansion stated that China’s presence on the European continent is becoming more significant.