Europeans Turn to Chinese Investors
World Economy

Europeans Turn to Chinese Investors

Equipment made by Putzmeister has been used to help smother out-of-control nuclear reactors in Chernobyl and Fukushima, but the German company had no technology to protect it when the global economic meltdown struck in 2008.
Putzmeister, based in the town of Aichtal, south of Stuttgart, suffered more than a 50 percent plunge in revenue and had to cut its German staff of about 2,500 by roughly half. Then, a rescuer came from an unlikely place: China.
In a deal that has become emblematic of Europe’s increasing openness to Chinese investors, Sany Group, a maker of construction equipment based in Changsha in Hunan Province, bought Putzmeister in 2012.
The apparent success of the combined company since then is one reason why Premier Li Keqiang of China received a warm welcome when he visited Berlin and Hamburg this month. Despite some remaining friction, Germany and Europe in general have largely overcome fears that Chinese investors would steal technology, close costly European factories and ship the production to China.
“With the difficult situation in the world economy that we see at the moment, it’s a sign of stability that economic cooperation between Germany and China is developing very well,” Chancellor Angela Merkel of Germany said on Oct. 10.

 Chinese Welcome
One reason that Europeans have become more welcoming of the Chinese is that they need the help. Economic growth is weak, the population is aging, and business investment is tepid. Besides money, Chinese investors help European companies get better access to China and other Asian markets.
Partly as a result, Europe has surpassed the United States as China’s largest trading partner, and Europeans appear to be eager for more. “I think it’s fair to say Europe is welcoming Chinese investment,” said Jeremy Clegg, a professor at Leeds University Business School in Britain who has studied the subject.
Another reason the Chinese are welcome is that, at least so far, they have proved to be unobtrusive, almost invisible, managers. At Putzmeister’s main plant in Aichtal, there is just one Chinese executive and five Chinese trainees, said Uwe Misselbeck, the company’s head of human resources.

But investment from China has grown at a much faster rate than that from any other country. The value of Chinese holdings in the European Union more than quadrupled from 2010 to 2012, to 26.8 billion euros, or $34 billion at current exchange rates, according to Eurostat, the official statistics agency.
Chinese companies have invested in ports in Genoa and Naples in Italy and in Athens. They have bought Italian makers of steel products, German manufacturers of patio furniture, and Hungarian chemical producers. Hamburg, which hosted Premier Li on Oct. 11 at a “China Meets Europe” meeting, has more than 500 Chinese companies in the city and surrounding area, according to the local chamber of commerce.
And investment from China could get a further boost as the Chinese government streamlines the approval process that domestic companies must go through before they invest abroad, according to KPMG.
Chinese investors have also drawn attention with a number of high-profile deals and their willingness to buy troubled companies. One of the most attention-getting acquisitions was in 2010 when Zhejiang Geely Holding bought Volvo Cars from Ford Motor.

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