Is China buying Europe ?
Year after year we are witnessing China's growing appetite for Europe's brands and technology. And China is cash-rich. A few weeks ago ChemChina has confirmed the acquisition of the Swiss company Sygenta for the amount of US$ 44 billion. It is the largest acquisition by a Chinese company in the world at this time. After massive investments in raw materials Chinese overseas investment focused on emblematic brands and advanced technologies. And the list of acquisition is impressive. Examples include Sanpower's, Hony Capital's, Pizza Express, Volvo, Peugeot, Swissmetal, Swissport, Corum, Louvre Hotels etc....State-owned Chinese groups accounted for 70% of a record € 20 billion invested by Chinese companies in the EU in 2015, up from 62% of € 14 billion invested in 2014 (Fig. Merics). The top destinations for Chinese investment in Europe during the period 2005-2013 included the UK, France, Switzerland and Greece (Fig.Heritage Foundation). But Germany was the most popular destination for Chinese companies in 2014 by volume, mainly in industrial and automotive business -incl.Putzmeister, Hilite,Kion- Europe is a specially attractive place for Chinese investments because it has a lot of world famous brands, high-technology groups and many opportunities due to cash-strapped companies. But it should also be emphasized that the existing European legislation is very open to foreign direct investment. This is not the case with China. The lack of reciprocity is obvious. Chinese authorities require European investors to set up joint-ventures with Chinese partners. These local partners follow logic and different rules. The State-owned or State-controlled companies are not operating on market principles. In a nutshell, the current picture is of an unequal market access. Finally, against a background of worsened economic conditions it would be wiser today not to grant the market economy status to China.