By Raffaello Pantucci, RUSI
There has been much speculation on the role of the Silk Road Fund (SRF) and Asian Infrastructure Investment Bank (AIIB) in China’s outward investment push.
They are both instruments created by Beijing to provide economic firepower and bring international credibility to the ‘Belt and Road’ vision that has become President Xi Jinping’s keynote foreign policy concept. But in reality they have both undertaken a series of investments that, while substantial and linked to ‘Belt and Road’ countries, pale in size next to China’s overall outward investments. Read more
By Sebastian Heilmann, Mercator Institute for China Studies
A wave of investment from China is breaking across Europe. Chinese takeovers of technological leaders have raised fears of a sell-out of our economies’ competitive advantage. In Germany, the Chinese Midea group’s offer to buy a controlling stake in the Bavarian robotics manufacturer Kuka has triggered fierce resistance.
Midea is the wrong target for the current backlash. But the debate over how to deal with Chinese investors is overdue. China’s state-guided outbound industrial and technology policies, aimed at technological leapfrogging through acquisitions, pose a formidable challenge to national investment regimes and EU competition policy. Read more
By Simon Rabinovitch and James Fontanella-Khan
Just two weeks on from George Osborne’s promise to accord special treatment to Chinese banks to draw them to London, one of the biggest has inaugurated its new European headquarters – in Luxembourg.
The opening of China Construction Bank’s European office in Luxembourg is a reminder that for all the controversy surrounding Osborne’s regulatory concessions, there is still a big question about how successful he will actually be in persuading Chinese banks to scale up their London operations.
Michael Buscher, chief executive of Oerlikon has reasons to be cheerful. The Swiss machine builder just sold its natural fibre and textile divisions to the Chinese Jinsheng Group for SFr650m ($700m).
It’s good deal, Buscher reckons, given that the divisions’ SFr1.1bn yearly revenues were seen as too cyclical. “As of now, we’re a better balanced and more profitable firm.” But Jinsheng has reasons to cheer as well. Read more
Another German Mittelstand has been snapped up by a Chinese manufacturer, this time in textiles.
Hong Kong-based Fong’s Industries has just completed its acquisition of Monforts, based just outside Dusseldorf, in the latest example of how Chinese companies are eager to purchase world-class engineering skills and innovation as well as market share in the developed world. Read more
The future of central and eastern Europe (CEE) rests on decisions being made beyond its borders, as a special report in Friday’s FT warns. The region relies on the eurozone for trade and investment.
But investors are recognising the fact that countries in CEE dealt with their fiscal problems especially quickly. Credit default swap spreads in Poland, the Czech Republic and Slovakia are converging with those in the core eurozone and deleveraging in CEE is more limited than in some west European markets. Read more
Chinese companies much prefer investing in Europe these days rather than the US, for a range of reasons from uncertainty over the upcoming US presidential election to the perception that Europe is just plain more willing to put itself on the block.
Two reports on Chinese outbound mergers and acquisitions, released on Tuesday, show a significant shift toward investment in Europe, especially when it comes to non-resource investment. The timing is apt: media reports say that Chinese telecoms maker Huawei will announce a big $1.9bn investment in the UK – not an M&A deal, but another significant China-Europe move. Read more
The European Union Chamber of Commerce in China has plenty of complaints about the way the Chinese government stands in the way of European companies that want to make money on the mainland – and most of this year’s complaints sound very similar to last year’s.
But even if Beijing and local governments throughout China are still not satisfying the EU chamber on many issues – like giving them what they consider a fair crack at public procurement contracts and the like – the government of Shanghai is doing at least some things right. That’s according to the chamber, which has published its European Business in China Position Paper 2012/2013. Read more
When Chinese clothes maker Bosideng decided to open its first overseas flagship store at the prestigious address of South Molton Street in London, it could hardly have foreseen the problems it would run into.
A re-landscaping of South Molton Street was one; the nearby huge Crossrail underground development was another, causing power issues and other disruption. Then the Olympic Games hit town, meaning there were fewer shoppers in London after the transport authority warned people to stay away from the city centre. A week after it opened, the shop is still running off generators rather than the electricity grid. Read more
A substantial new Chinese loan deal for a Bosnian power plant indicates the progress that the country is making in realising its potential as an energy exporter. In a region in which several countries have a power deficit, Bosnia is leveraging its competitive advantages and drawing international investment to the electricity sector.
Energy Financing Team, a UK-based company active in Balkan energy markets, has secured a €350m deal with the state-owned China Development Bank (CBD) to construct a 300MW coal-fired plant in Stanari, northern Bosnia. Read more
One person’s crisis is another’s buying opportunity. With Europe stuck in financial turmoil, are the Brics – and in particular the Chinese – buying the place up?
Answer: yes, but not as much as you might think. Read more
News this week that the bankrupt Swedish carmaker has been bought by a Chinese-led investment group and will be turned into a maker of electric cars for Asian markets seems, at last, to bring Saab’s sad story to a long-awaited resolution.
But the deal raises as many questions as it answers. Read more
A pioneering Chinese company is planning to buy a bank in Georgia – and become, it says, the first privately-owned Chinese group to buy a foreign bank. At around $100m, it’s a small deal for China but a pretty big one for investment-hungry Georgia – and for Xinjiang Hualing Industry and Trade Group.
The company, founded in the far western city of Urumqi in 1988, is in the process of securing regulatory approval to acquire 90 per cent of Basisbank, Georgia’s 11th largest bank in terms of assets. Read more
Chinese investments in Europe tripled in 2011, and could reach as much as $250bn-$500bn by 2020, the FT reported on Thursday. Is China taking over corporate Europe? Read more
Chongqing isn’t just the world’s biggest city (depending how you measure it), one of the fastest growing places in China, and the venue for a murder mystery that is still shaking China’s political foundations. It is now reachable directly from Europe.
Finnair’s first Helsinki-Chongqing flight takes off on Wednesday, and opens a route that will operate four times a week. But is it needed? Read more