Friday

20th Oct 2017

Focus

EU sees dramatic surge in investment from China

  • Money: Europe needs it, China has it. (Photo: dolmansaxlil)

In what has been called “a definite turning point,” China’s direct investment in Europe over the last couple of years has multiplied by a factor 10, according to a new study.

EU trade commissioner Karel De Gucht welcomed the news, saying that “we need the money."

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

“Our dataset shows a profound post-2008 surge,” says the new study, presented on Thursday (7 June) in Brussels by consultancy firm Rhodium Group. “From €700 million yearly 2004-2008, to roughly €2.3 billion in 2009 and 2010, to €7.4 billion in 2011.”

Most of that money went to France - with more than €4.5 billion in investment over the last decade - the UK (€3bn), and Germany (€2bn).

Outliers are Hungary (€1.7bn) and Greece (€571 million), who according to the study both attracted one large-scale investment from China: Hungary in its chemical sector and Greece in the port of Piraeus.

The study adds that even though the numbers remain small compared to the EU’s total inward foreign investment - around 3 percent - “the change in trend line is what matters.”

Over the next decade, it says, “even if Chinese outflows underperform, an annual average of $20-30 billion (€16-24 billion) [of direct investment in Europe] would be expected” - which would amount to an annual inflow greater than total investment over the last decade.

“This is definitely a turning point,” Daniel Rosen, a partner at Rhodium Group and co-author of the report, told EUobserver in an interview.

Chinese companies are not as “inherently international” as Western companies are, he said, due to cultural and political reasons. “It is very difficult for them to go abroad.”

The fact that now they do, encouraged by the Chinese political leadership, means that “we’re entering a new era."

China recently became the world’s fifth biggest outward investor after the United States, Germany, France and Hong Kong. Rosen: “China is no longer just a host but now also a source of investment.”

For his part, EU trade commissioner De Gucht welcomed the news.

“In Europe today, let us be frank: We need the money,” he said in a speech at the presentation of the study, referring to the old continent’s dire state of economic affairs.

“On the one hand, as member state governments privatise in response to the crisis, they need investors to buy what they are selling. On the other, new capital is the basis for new growth,” he added.

Yet fears of Europe putting itself up for sale are unjustified, Rosen said. “We see the same pattern in the US. This is not a fire sale.”

Nor, he said, are fears of impending political influence through the backdoor of companies.

“China is investing like any other commercially motivated investor, not in some odd and idiosyncratic way,” the study says. “We see practically no evidence of declining investment prospects for states which run afoul of China politically over issues such as Tibet or arms sales.”

If anything, Rosen said, Europe should be happy with his new-found stockholder.

“It is great news for European consumers,” he said. And even though “producers might have mixed feelings, it is also good or job creation.”

Chinese companies today employ some 45,000 Europeans, according to the study, “and this figure is poised to grow further."

By contrast, US companies today employ some 4.3 million Europeans.

MEPs and China mark change in relationship

Members of the five big political groups in the European Parliament have met with members of the one big political group in the National People's Congress of China, in what has been described as a “changing” and "very friendly" climate.

EU countries praise Tusk's new summit plans

EU capitals voice support for more summits, tackling divisive issues and sometimes deciding by majority - not consensus - as outlined in the European Council president's plan.

News in Brief

  1. Italian regions hold referendums on more autonomy
  2. EU leaders refuse to mediate Catalonia conflict
  3. Dutch PM: Brexit is 'still a bad idea'
  4. Commission to issue proposal on civil protection
  5. Tusk: 'No space' for EU intervention in Catalonia
  6. Austrian PM calls Brexit talks speed 'big disappointment'
  7. PM Muscat: journalist murder 'left a mark' on Malta
  8. Belgian PM: No crisis with Spain over Catalan remarks

Stakeholders' Highlights

  1. European Jewish CongressEJC Applauds the Bulgarian Government for Adopting the Working Definition of Antisemitism
  2. EU2017EENorth Korea Leaves Europe No Choice, Says Estonian Foreign Minister Sven Mikser
  3. Mission of China to the EUZhang Ming Appointed New Ambassador of the Mission of China to the EU
  4. International Partnership for Human RightsEU Should Seek Concrete Commitments From Azerbaijan at Human Rights Dialogue
  5. European Jewish CongressEJC Calls for New Austrian Government to Exclude Extremist Freedom Party
  6. CES - Silicones EuropeIn Healthcare, Silicones Are the Frontrunner. And That's a Good Thing!
  7. EU2017EEEuropean Space Week 2017 in Tallinn from November 3-9. Register Now!
  8. European Entrepreneurs CEA-PMEMobiliseSME Exchange Programme Open Doors for 400 Companies Across Europe
  9. CECEE-Privacy Regulation – Hands off M2M Communication!
  10. ILGA-EuropeHealth4LGBTI: Reducing Health Inequalities Experienced by LGBTI People
  11. EU2017EEEHealth: A Tool for More Equal Health
  12. Mission of China to the EUChina-EU Tourism a Key Driver for Job Creation and Enhanced Competitiveness

Latest News

  1. May on mission impossible in Brussels
  2. EU seeks to shut down sea route from Libya
  3. Digital debate will be first test of Tusk's new policy crowbar
  4. EU Parliament: EU migrant quotas do have a future
  5. EU countries praise Tusk's new summit plans
  6. Commission employs double standards in Spain
  7. Legal study sounds alarm on 'Baysanto' merger
  8. Health MEPs want to phase out glyphosate by 2020