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2013-01-31 | All chapters

European Chamber Survey: Chinese investors bullish on European future, but show concern about operating environment

Beijing, 31st January 2013 – Chinese companies operating in the EU will be increasing their investments and looking to further engage in M&A in order to serve the European market and acquire technology, brands and expertise to improve competitiveness, according to Chinese Outbound Investment in the European Union, a survey released today by the European Union Chamber of Commerce in China, in cooperation with KPMG and Roland Berger Strategy Consultants.

The EU is perceived by Chinese investors as a stable environment with advanced technologies, skilled labour and a transparent legal environment. In addition, it 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 European operating environment is not, however, regarded as particularly easy to navigate; with the majority of respondents reporting encountering operational obstacles. The major impediments identified include difficulties in obtaining visas and work permits for Chinese employees, and problems dealing with European labour laws. Understanding the EU market is also a key concern, due to the lack of uniform legislation over the region of 27 member states and 23 official languages.

Recommendations made by Chinese enterprises to European policy makers focus on these operational issues, with notably few making recommendations relating to market access in the EU. This sharply contrasts with the main recommendations of European businesses operating in China as communicated in the European Chamber’s annual Position Paper.

Davide Cucino, President of the European Chamber commented, “Greater Chinese investment in the EU is a positive trend and this survey clearly shows that Chinese companies face few regulatory market access barriers in Europe. This contrasts to the situation for European companies in China where a lack of market access massively restricts the areas where EU industry can operate. We look forward to further opening up in China to address this market access asymmetry and to attract more FDI.”

Thomas Rodemer, Partner, KPMG stated, “Through its Global China Practice, KPMG has helped several Chinese companies enter, expand, and build a presence in Europe.  The study results are in line with KPMG’s observations that Chinese companies invest in Europe primarily to sell their goods and services in the EU market. They are confident about their future in Europe and intend to increase their presence.”

Charles Edouard-Bouée, Member of Global Executive Committee, President of Asia, Roland Berger Strategy Consultants said, "Europe is now a full part of the investment strategy of Chinese companies. Our work with them demonstrates that this is a top priority for them as well as a true operational challenge."

Key findings:

Of 74 surveyed Chinese enterprises that have invested in the EU:

·         97% plan to make future additional investments in the EU, with 82% planning to invest higher amounts than their current investments;

·         78% report encountering operational difficulties in the EU, mostly related to issues of bureaucracy and high costs;

·         48% report encountering regulatory approval obstacles in Europe, with these mostly arising at the local level;

·         27% report encountering outbound investment approval processes from within China as an obstacle;

·         85% are in Europe in order to sell their goods and services in the EU market.

The publication can be downloaded here.

 

About the Publication

Chinese Outbound Investment in the European Union is a European Union Chamber of Commerce in China publication that was written in cooperation with KPMG and Roland Berger Strategy Consultants.

The findings are based on a unique questionnaire that was completed by 74 enterprises originating from mainland China who had previously completed at least one investment within the EU.

The profile of the survey respondents in China is:

·         Representative of a wide range of sectors;

·         Roughly two-thirds state-owned and one-third private;

·         Approximately two-thirds listed and one-third unlisted;

·         Large in terms of number of employees and revenue.

Their profile in the EU is:

·         Investments concentrated in Western Europe;

·         The majority having a relatively small presence in terms of employees and size of investments;

·         Greenfield investment being more common than M&A or other means;

·         Approximately half having invested in the past five years with the other half six years or more.

This data was supplemented with information gathered from 14 interviews with Chinese enterprises, Chinese Government bodies, and European experts from the public and private sector.

Source: The European Union Chamber of Commerce in China

For more information please contact

Yichi Zhang

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