World Economy

Chinese Invest Record $38b in Europe, US Last Year

Chinese Invest Record $38b in Europe, US Last YearChinese Invest Record $38b in Europe, US Last Year

Chinese investors poured a record $23 billion in Europe and $15 billion into the United States last year, with investments concentrated in the real estate, automobile, finance and IT sector, according to a report released by global law firm Baker & McKenzie.

The report said Chinese investors picked Italy, France, and the United Kingdom as the top three investment destinations in Europe last year, Asia First reported.

The US states of New York, California, and Texas also received the most investments from China last year. Chinese investments in Europe and the United States hit a record high last year despite a number of trade issues involving Chinese traders in those regions.

According to the law firm, Chinese investors managed to get into the high-tech and high-end manufacturing sectors in Europe and the US by acquiring well-known firms. The report also said that Chinese investors are particularly interested in investing in housing and infrastructure in their search for long-term returns as the economic slowdown in China continues.

However, the figures suggest that the pace of Chinese investment in western economies may be slowing.

New investment in Europe was up 28% on the $18 billion registered in 2014, a smaller increase than 2014’s doubling of the 2013 figure. Investment in the US was up 17% compared to 2014’s level of $12.8 billion.

Concerns about China’s economy have dragged down global financial markets, affecting prospects for the eurozone and many others. Such worries are one reason why the European Central Bank was expected on Thursday to unleash a new round of economic stimulus.

Meanwhile, figures such as Wang Jianlin, China’s richest man, have raised concerns about Chinese state-owned enterprises’ investments in Europe, arguing that they lack international management standards.

But Michael DeFranco, chair of Baker & McKenzie’s M&A practice, hailed the Chinese group’s investment in developed economies.

“These are turbulent economic times and yet we see Chinese companies acting with confidence and continuing to make major moves in Europe and North America,” he said.

  Back on Track

Chinese investment in western economies is back on track to break the record again in 2016: during the first six weeks this year Chinese groups announced $70 billion in potential deals, although the number is highly provisional and not all such acquisitions will be completed.

Chinese direct investment in the eurozone was up 37% in 2015, rising to $17.1 billion from $12.5 billion.

Italy, one of the eurozone’s weaker economies, received the most investment of any EU nation from Chinese companies. That was largely down to a $7.9 billion deal between Pirelli and ChemChina. France was the number two country, receiving $3.6 billion of investment through a string of big deals in the tourism and infrastructure sectors.

In the US, New York, California and Texas received the most investment. Chinese companies invested $5.4 billion in New York, the top beneficiary, with most of the money spent on three big financial services and property deals.