As the US-China trade war rages, scepticism over Chinese-led deals rises in Europe
- Environment ‘tougher’ as concerns grow among European governments over Chinese efforts to acquire technology leaders
- European Union considering new measures to block deals on national security grounds
A sharp-elbowed confrontation between the Trump Administration and China over trade has weighed heavily on Chinese-led mergers and acquisitions into the United States this year.
That has Chinese buyers and their advisers looking to other markets for potential deals, particularly Europe, where the overall value of transactions is at its second-highest level in the past decade.
Europe, however, may not be as welcoming a place for future Chinese investments as concerns are growing over the country’s industrial policies, particularly over technology transactions, market observers said.
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The United Kingdom and Germany have expanded their ability to block deals involving certain so-called critical technologies this year and the European Union is expected to adopt new bloc-wide rules in 2019 that will give countries a broader framework to review transactions on national security grounds.
“Undeniably the climate for China deals in most – though not all – EU members is getting tougher,” said Jacob Kirkegaard, senior fellow at the Peterson Institute for International Economics, a Washington think tank. “This is particularly the case for deals concerning technology firms, but in some cases also related to the sales of ‘critical infrastructure’.”
The rising concern in the US and in Europe over Chinese investment revolves around Beijing’s efforts to acquire technology and advance its manufacturing base, personified by its three-year-old “Made in China 2025” programme. The initiative is designed to improve the country’s domestic market share in several high-technology sectors, including robotics and electric vehicles.
The US has cited China’s efforts to remake itself as a hi-tech superpower in imposing tariffs on nearly half of all goods imported from China and in enacting broader reviews of mergers involving critical technologies, such as biotechnology and semiconductors.