EU ‘better than North America’ for China firms
Chinese firms consider the European Union as good or better an investment destination than North America, the EU chamber of commerce in China said on Thursday, despite the euro zone’s debt crisis and recessionary woes.
Even more preferred to put money into the European Union than nearby Southeast Asia, where some countries have significant Chinese minorities.
The European Union “is perceived as welcoming to foreign investment; with few market access barriers and little history of opposition to Chinese investment on national security grounds”, the report said.
The survey of 74 Chinese companies that have already established themselves in the European Union found 33 per cent considered it more favourable for investment than North America, with 45 per cent saying it was the same and 21 per cent less favourable.
Compared to Southeast Asia, 48 per cent said the European Union was more favourable and 28 per cent less favourable, with 24 per cent seeing them as the same.
But the report added that according to Chinese government data just five per cent of Chinese overseas investment went to Europe in the 2004-2010 period.
“This would mean that mainland Chinese investments only counted for 1.4 per cent of total ODI (outward direct investment) into the EU in 2011, whereas the EU accounts for around 20 per cent of investment into China,” it said.
The actual proportions may be different, it pointed out, as more than 60 per cent of mainland Chinese overseas investment goes to Hong Kong, and it was likely the final destination was elsewhere for “a significant proportion” of that.
Chinese officials have criticised Washington for placing barriers to trade and doing business with the United States.
A US congressional committee said in October last year that Chinese telecom giants Huawei and ZTE should be excluded from government contracts because their equipment could be used to spy.
In an earlier case, Chinese state-owned energy giant CNOOC was forced to withdraw its bid to buy US oil and gas producer Unocal in 2005 following an outcry in Washington.
The surveyed firms were described as “large in terms of number of employees and revenue”, and around two-thirds were state-owned, the European chamber said.
It found 97 per cent will continue to invest in the European Union, with 82 per cent saying they would increase their amounts, but 78 per cent reported finding operational difficulties in the region, mostly related to bureaucracy and cost issues.
“They are looking for new markets to place their products,” Davide Cucino, president of the chamber, told reporters, adding that the companies wanted to “acquire technology and experience they don’t have in mainland China”.
Chinese investments overseas reached US$77 billion last year, up 28.6 per cent year on year.