Shopping Tour ends + KP can Capitalism • China.Table

Less direct investment in the EU
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Dear reader,

great was the fear of Beijing’s shopping spree. In view of the Corona pandemic, there were fears from Lisbon to Brussels and Berlin to Nicosia that China could now go on a bargain hunt for ailing companies from the key industries of the European Union. An electricity supplier here, a producer of important industrial metals there, perhaps an airport to boot. But the fears are apparently not coming true.

Because: Chinese direct investments in Europe declined last year, as a study by the Berlin research institute Merics and the Rhodium Group shows. Finn Mayer-Kuckuk explains the reasons behind the decline in investment. In addition to waning interest from the People’s Republic, defensive mechanisms of the EU also play a decisive role in the trend.

On the other hand, the number of used e-car batteries is increasing instead of decreasing. As the market in China is booming, more and more of the worn-out lithium-ion batteries are also accumulating – but where to put them? The Ministry of Industry and Information Technology is now taking manufacturers to task even harder, writes Frank Sieren. They should pay more attention to recycling.

To our readers in Germany and China, we wish you good air conditioning or cooling ice cream today. Get through the hottest day of the working week well.

Your
Amelie Richter

Feature

Investment in the EU falls to Ten-Year Low

Mergers and acquisitions by Chinese companies in the EU continue to decline, according to a joint study by the research institute Merics and the Rhodium Group. In part, this is because the Chinese state is putting the brakes on. Foreign acquisitions are no longer as desirable as they were five years ago. But EU countries, for their part, are also increasingly wary, calling for closer scrutiny of deals. The political climate is doing its bit to scare off investors.

By
Finn Mayer-Kuckuk

China’s economy is losing its appetite for corporate shopping in the EU. Chinese investment in the EU fell again in the first quarter of the current year, according to a study by research institute Merics together with Rhodium Group. According to the study, Europe attracted only 700 million from China from January to March. In the same quarter last year, it was twice as much, despite Corona. In 2019, investments in the first quarter even reached more than eight billion euros, twelve times the current value. The decline is against the trend. Globally, mergers and acquisitions are booming – but Chinese direct investment in Europe is at a ten-year low.

In the outlook, too, the researchers do not expect a return to the high cash flows of the past. “The wind is blowing in the face of Chinese investors”, according to the latest version of the annual study “Chinese FDI in Europe“. They cite tighter capital controls by the Beijing government as the main reason. Despite the rapid recovery from the Corona crisis, many restrictions and quotas remain in place. For example, the cap on foreign investment under the QDII (Qualified Domestic Institutional Investors) 2021 programme has risen only minimally.

Beijing no longer seems to think big buying sprees in other markets are such a good idea as it did in 2016, when Chinese investment in the EU amounted to more than €50 billion…. Last year, it was only 6.8 billion euros. The observation that state-owned enterprises have recently been particularly reluctant to invest abroad fits the interpretation of a small political realignment.

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