Skip to main content

Chinese FDI in Europe: 2019 Update


Chinese foreign direct investment (FDI) in the European Union (EU) continued to contract in 2019, mirroring the decline in Chinese investments globally. Chinese firms completed FDI transactions worth EUR 12 billion, a decline of 33 percent from 2018 levels, bringing the total back to 2013 levels. This was due mainly to continuing capital controls, a clampdown on “irrational” acquisitions of a few key investors and a deleveraging campaign that reduced Chinese firms’ ability to finance overseas assets purchases. Along with a shift in geographical distribution, preferred sectors changed, with consumer products and services overtaking automotive as the main target for Chinese investors.

While equity investment has fallen, research and development collaborations between Chinese and foreign firms, universities and governments have continued to grow. Although the majority are benign and desirable from a European perspective, some raise concerns that must be addressed, including the transfer of critical and dual-use technologies to China’s military-industrial complex or contribute to the state’s ability to exert control over its population.

These are the key findings of the latest joint report of Rhodium Group and MERICS “Chinese FDI in Europe: 2019 Update” by Agatha Kratz, Mikko Huotari, Thilo Hanemann and Rebecca Arcesati, that was released today.

The authors argue that the global Covid-19 pandemic will deeply impact global capital flows. Early data points indicate that the first quarter of 2020 will show the lowest outbound deal volume from China in almost ten years. Yet the crisis is also creating buying opportunities in Europe and elsewhere. The authors expect Chinese outbound investment to increase during the remainder of the year, but a return to boom levels of 2015-2016 levels is unlikely.

As with investment screening, EU leaders need to find solutions that address specific concerns while preserving Europe’s economic openness. The authors argue that scrutiny should be expanded to cover R&D collaborations. Failure to act will invite pushback from key allies and OECD partners, risking costly and unnecessary decoupling. Researchers, whether at companies or universities, must understand China’s firms and policies better, to identify and mitigate against risks. Addressing these challenges, MERICS and Rhodium Group give initial recommendations on how to respond.

You can read the full report “Chinese FDI in Europe: 2019 Update” with the special focus on research collaborations online here.

Comments

Popular posts from this blog

SSG Commando Muddassir Iqbal of Pakistan Army

“ Commando Muddassir Iqbal was part of the team who conducted Army Public School operation on 16 December 2014. In this video he reveals that he along with other commandos was ordered to kill the innocent children inside school, when asked why should they kill children after killing all the terrorist he was told that it would be a chance to defame Taliban and get nation on the side. He and all other commandos killed children and later Taliban was blamed. Muddassir Iqbal has deserted the military and now he is  with mujahedeen somewhere in AF PAK border area” For authenticity of  this tape journalists can easy reach to his home town to interview his family members or   ISPR as he reveals his army service number” Asalam o Alaikum: My name is Muddassir Iqbal. My father’s name is Naimat Ali. I belong to Sialkot divison (Punjab province), my village is Shamsher Poor and district, tehsil and post office  Narowal. Unfortunately I was working in Pakistan army. I feel embarrassed to tell yo

RWR Advisory: Belt and Road at a Glance

This edition covers developments from March 12 - March 26..  Belt and Road at a Glance   Subscribe to the Belt and Road Monitor Top Developments China National Machinery Industry Corporation, commonly known as Sinomach, has agreed to  build  a $845 million, 255-mile railway across  Iran , building upon a sustained period of growth for Chinese investment in Iran that accelerated after Xi Jinping’s state visit to the country in January 2016. The railway will link the cities of Tehran, Hamedan and Sanandaj. China Civil Engineering Construction, a subsidiary of CRCC, is currently also  building  a 263-km railway line from Kermanshah to Khosravi. According to Chinese entrepreneur Lin Zuoru, who  owns  factories in Iran, “Iran is at the center of everything.”On March 23, China’s Ministry of Commerce announced that foreign direct investment by Chinese companies in 50 Belt and Road countries fell by 30.9% year-on-year. While the Ministry stated that this number covers investment across al

CPEC Jobs in Pakistan, salary details

JOBS...نوکریاں چائنہ کمپنی میں Please help the deserving persons... Salary: Salary package in China–Pakistan Economic Corridor (CPEC) in these 300,000 jobs shall be on daily wages. The details of the daily wages are as follows; Welder: Rs. 1,700 daily Heavy Duty Driver: Rs. 1,700 daily Mason: Rs. 1,500 daily Helper: Rs. 850 daily Electrician: Rs. 1,700 daily Surveyor: Rs. 2,500 daily Security Guard: Rs. 1,600 daily Bulldozer operator: Rs. 2,200 daily Concrete mixer machine operator: Rs. 2,000 daily Roller operator: Rs. 2,000 daily Steel fixer: Rs. 2,200 daily Iron Shuttering fixer: Rs. 1,800 daily Account clerk: Rs. 2,200 daily Carpenter: Rs. 1,700 daily Light duty driver: Rs. 1,700 daily Labour: Rs. 900 daily Para Engine mechanic: Rs. 1,700 daily Pipe fitter: Rs. 1,700 daily Storekeeper: Rs. 1,700 daily Office boy: Rs. 1,200 daily Excavator operator: Rs. 2,200 daily Shovel operator: Rs. 2,200 daily Computer operator: Rs. 2,200 daily Security Supervisor: Rs.