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Chinese Investment in Europe Reaches Record High

Chinese Investment in Europe Reaches Record HighChinese Investment in Europe Reaches Record High

Chinese outbound foreign direct investment soared to a record high in 2016 to reach nearly $200 billion, a report said Wednesday.

The European Union continues to be the favorite destination for Chinese investors, however imbalances are growing as Chinese investors spent four times as much on acquisitions in the EU last year as European investors did in China, DPA reported.

The study by research firm Rhodium Group and the Mercator Institute for China Studies estimated that Chinese direct investment in the EU grew by 76% to €35.1 billion ($36.9 billion) in 2016, dwarfing the opposite flow of €7.7 billion.

"The increase in Chinese OFDI was so dramatic in 2016 that China's leadership is now stepping on brakes on the pace of capital outflows ... Beijing has already taken steps to tighten reviews and crack down on illegitimate transactions," the report said.

The authors attributed some European companies' hesitance to invest in China to slowing economic growth in China as well as hurdles for access to the country's markets.

"The only way to ensure that the European business community, government leaders and the broader public continue to welcome growing Chinese investment in Europe is to make real progress on reforms that increase the role of markets and level the playing field for foreign companies in China," the report said.

The authors attributed some European companies' hesitance to invest in China to slowing economic growth in the world's second-largest economy as well as to hurdles for access to the country's markets.

"The only way to ensure that the European business community and government leaders continue to welcome growing Chinese investment in Europe is to make real progress on reforms that increase the role of markets and level the playing field for foreign companies in China," the study concluded.

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