Asean
Understanding the Chinese-EU investment relationship
Author: Hinrich Voss and L. Jeremy Clegg, Leeds University Since China embarked on its ambitious opening and reform process, its commercial relationship with the European Union has flourished. Although bilateral trade growth has been an important part of this, European multinational enterprises (MNEs) have been swift to target China for foreign direct investment (FDI). With the path blazed by large MNEs, increasingly smaller firms are following in the footsteps of the European majors such as the carmaker Volkswagen, or the chemical firm BASF, to use FDI to get a foothold in the Chinese market. Now the roles are shifting as Chinese investors descend on Europe. Reportedly, Chinese firms have been willing to acquire any ailing European firm, and are lining up to make major new large-scale investments. These perceptions are fuelled by acquisitions like Nanjing Automobile Corporation’s and Shanghai Automobile Industry Corporation’s acquisition of UK-based MG Rover in 2004–5, by Geely of Swedish-based Volvo in 2010, or of business units belonging to Thomson and Alcatel by TCL in 2004–5. These developments have caused two types of reactions. European governments and regional institutions have started to court Chinese companies and quarrel about who has been most successful in doing so. In some countries investment attraction has been nationally orchestrated to more effectively increase Chinese FDI, as in the case of the United Kingdom, with its government-run UK Trade & Investment network within China reaching out to Chinese firms. This network has been supported within the UK by regional investment promotion agencies. Other European countries have followed suit, by establishing their own networks within China. Cautionary voices have argued that, if the enterprise sector in the EU is bought out by China, the EU will risk losing its domestically-owned industrial capabilities and technological leadership. This has led to a call to monitor and screen investments into the EU, in particular from China and other emerging markets, for their fit with European objectives. Both stances — positive and apprehensive — toward Chinese FDI need to be put into perspective, and understood in terms of the motives of the Chinese investors themselves. Broadly speaking, there are two types of Chinese investor. Large state-owned firms with favourable access to government capital seek to diversify their portfolios of real assets, and thereby the wealth portfolio of the Chinese state, through the acquisition of western assets. In contrast, investors originating in the vibrant Chinese domestic private sector are seeking profitable investment opportunities to upgrade their industrial capabilities and to grow their business. For these firms the purchase of strategic assets is made on the basis of fit with their corporate industrial strategy. However, for private firms, the opportunities offered by Chinese domestic market growth reduce the pull of markets abroad, which are growing at a slower pace. This certainly applies to EU market growth, with the exception of the high growth (but generally small) economies of the twelve countries joining in 2004 and 2007. The implications of this Chinese investment behaviour are visible across the EU. The EU-27 has collectively played only a very minor part in China’s outward investment strategy. Less than 3 per cent of China’s global investment stock was located in the EU in 2009. However, discounting the entrepôt and investment hub Luxembourg, of this investment the 12 newly acceded countries attracted over 10 per cent of the EU’s total. This is a greater proportion than their share of EU GDP, and suggests that Chinese investment decisions are driven primarily by growth. If we were to characterise the spatial distribution of Chinese FDI within the EU, it might be said to mirror that of South Korean investment, rather than Japanese, which favours the larger economies. However, Chinese investment in the EU is still at a level where a clear pattern is yet to be established; over the last decade there is little evidence of a continuous and focused investment strategy in particular countries. While the EU has been of limited importance in China’s outward investment strategy, Chinese investment has equally kept a low profile within the EU . The numbers of Chinese affiliates are low across the Union, and Eurostat figures show that their contribution to employment is minor — it should be noted that individual member states can report significantly higher values for selected FDI data than Eurostat does. Can we expect Chinese investments in the EU to grow? Chinese investments in Hungary, Poland and Romania have recently picked up. These transition economies have been especially attractive to Chinese firms, largely because they offer growth and are coupled with deep privatisation and liberalisation (Hungary), a large market (Poland) and a favourable business environment in the eyes of Chinese investors (Romania). The recent increase in Chinese investments in Central and Eastern European countries may also reflect a change in Chinese investment strategies towards targeting lower production cost sites within the EU, as a means of expanding market shares across the EU via export. Another development that could lead to an increase of Chinese investment over the coming years is the Treaty of Lisbon. Following this Treaty, as with Trade, one commissioner represents the EU in the sphere of FDI and is responsible for investment liberalisation. Now the authority for FDI policy resides at the EU level, it can have a single, united voice when dealing with China. This should make it easier for the EU as a whole to articulate its policy towards China, and to bring some coherence to the bewildering range of diverse institutional systems within the EU that are faced by the much sought after Chinese investor. Hinrich Voss is Roberts Fellow at the Centre for International Business at Leeds University Business School. L. Jeremy Clegg is Jean Monnet Professor of European Integration and International Business Management at Leeds University Business School. Europe needs to screen Chinese investment Traps for Chinese investment overseas Chinese investment in Australian resources
Author: Hinrich Voss and L. Jeremy Clegg, Leeds University
Since China embarked on its ambitious opening and reform process, its commercial relationship with the European Union has flourished. Although bilateral trade growth has been an important part of this, European multinational enterprises (MNEs) have been swift to target China for foreign direct investment (FDI). With the path blazed by large MNEs, increasingly smaller firms are following in the footsteps of the European majors such as the carmaker Volkswagen, or the chemical firm BASF, to use FDI to get a foothold in the Chinese market.
Now the roles are shifting as Chinese investors descend on Europe. Reportedly, Chinese firms have been willing to acquire any ailing European firm, and are lining up to make major new large-scale investments. These perceptions are fuelled by acquisitions like Nanjing Automobile Corporation’s and Shanghai Automobile Industry Corporation’s acquisition of UK-based MG Rover in 2004–5, by Geely of Swedish-based Volvo in 2010, or of business units belonging to Thomson and Alcatel by TCL in 2004–5.
These developments have caused two types of reactions. European governments and regional institutions have started to court Chinese companies and quarrel about who has been most successful in doing so.
In some countries investment attraction has been nationally orchestrated to more effectively increase Chinese FDI, as in the case of the United Kingdom, with its government-run UK Trade & Investment network within China reaching out to Chinese firms. This network has been supported within the UK by regional investment promotion agencies. Other European countries have followed suit, by establishing their own networks within China. Cautionary voices have argued that, if the enterprise sector in the EU is bought out by China, the EU will risk losing its domestically-owned industrial capabilities and technological leadership. This has led to a call to monitor and screen investments into the EU, in particular from China and other emerging markets, for their fit with European objectives.
Both stances — positive and apprehensive — toward Chinese FDI need to be put into perspective, and understood in terms of the motives of the Chinese investors themselves. Broadly speaking, there are two types of Chinese investor. Large state-owned firms with favourable access to government capital seek to diversify their portfolios of real assets, and thereby the wealth portfolio of the Chinese state, through the acquisition of western assets. In contrast, investors originating in the vibrant Chinese domestic private sector are seeking profitable investment opportunities to upgrade their industrial capabilities and to grow their business. For these firms the purchase of strategic assets is made on the basis of fit with their corporate industrial strategy. However, for private firms, the opportunities offered by Chinese domestic market growth reduce the pull of markets abroad, which are growing at a slower pace. This certainly applies to EU market growth, with the exception of the high growth (but generally small) economies of the twelve countries joining in 2004 and 2007.
The implications of this Chinese investment behaviour are visible across the EU. The EU-27 has collectively played only a very minor part in China’s outward investment strategy. Less than 3 per cent of China’s global investment stock was located in the EU in 2009. However, discounting the entrepôt and investment hub Luxembourg, of this investment the 12 newly acceded countries attracted over 10 per cent of the EU’s total. This is a greater proportion than their share of EU GDP, and suggests that Chinese investment decisions are driven primarily by growth.
If we were to characterise the spatial distribution of Chinese FDI within the EU, it might be said to mirror that of South Korean investment, rather than Japanese, which favours the larger economies. However, Chinese investment in the EU is still at a level where a clear pattern is yet to be established; over the last decade there is little evidence of a continuous and focused investment strategy in particular countries.
While the EU has been of limited importance in China’s outward investment strategy, Chinese investment has equally kept a low profile within the EU. The numbers of Chinese affiliates are low across the Union, and Eurostat figures show that their contribution to employment is minor — it should be noted that individual member states can report significantly higher values for selected FDI data than Eurostat does.
Can we expect Chinese investments in the EU to grow? Chinese investments in Hungary, Poland and Romania have recently picked up. These transition economies have been especially attractive to Chinese firms, largely because they offer growth and are coupled with deep privatisation and liberalisation (Hungary), a large market (Poland) and a favourable business environment in the eyes of Chinese investors (Romania). The recent increase in Chinese investments in Central and Eastern European countries may also reflect a change in Chinese investment strategies towards targeting lower production cost sites within the EU, as a means of expanding market shares across the EU via export.
Another development that could lead to an increase of Chinese investment over the coming years is the Treaty of Lisbon. Following this Treaty, as with Trade, one commissioner represents the EU in the sphere of FDI and is responsible for investment liberalisation. Now the authority for FDI policy resides at the EU level, it can have a single, united voice when dealing with China. This should make it easier for the EU as a whole to articulate its policy towards China, and to bring some coherence to the bewildering range of diverse institutional systems within the EU that are faced by the much sought after Chinese investor.
Hinrich Voss is Roberts Fellow at the Centre for International Business at Leeds University Business School.
L. Jeremy Clegg is Jean Monnet Professor of European Integration and International Business Management at Leeds University Business School.
- Europe needs to screen Chinese investment
- Traps for Chinese investment overseas
- Chinese investment in Australian resources
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Understanding the Chinese-EU investment relationship
Asean
Deadly Floods and Landslides Strike Indonesia and Thailand – Vietnam Plus
At least seven people were killed, two others were injured and some were likely to be missing after flash floods and landslides hit the Indonesian eastern province of Maluku on the morning of August 25, according to the locality’s disaster management and mitigation office.
Heavy rainfall, which began on August 24, has triggered the disasters in Ternate city. Many local residents are in urgent need of support, authorities said.
Soldiers, police, local search and rescue personnel, disaster management staff, and volunteers are all involved in the ongoing rescue efforts, which include evacuating those trapped by the landslides and recovering materials from homes swept away by the floods.
Meanwhile in Thailand, local authorities reported that the death toll from a landslide in the popular resort province of Phuket on August 23 has risen to 13, including a Russian couple.
Source : Floods, landslides kill many in Indonesia, Thailand – Vietnam Plus
Asean
Tug of War in Southeast Asia: Can ASEAN-China Dialogue Shift the Scales Toward Peace? – An Analysis
The ASEAN-China dialogue is vital for regional stability, addressing economic cooperation and security challenges, particularly in the South China Sea, amidst significant geopolitical complexities and ongoing territorial disputes.
ASEAN-China Dialogue: A Path Towards Cooperation
The ASEAN-China dialogue plays a pivotal role in Southeast Asia’s diplomacy, fostering economic collaboration while addressing security challenges. Despite advances, particularly in managing tensions in the South China Sea, significant barriers remain to achieving lasting peace and stability in the region. ASEAN’s capacity to maintain its unity and centrality is crucial amidst complex power dynamics involving China and other global players.
Navigating Tensions and Economic Relations
A pressing concern within this dialogue is the South China Sea territorial disputes, which involve multiple ASEAN states and China. The militarization of the area raises alarm among regional stakeholders, necessitating urgent negotiations for a Code of Conduct (COC) to manage conflicts. Additionally, the growing economic interdependence fostered by initiatives like the Regional Comprehensive Economic Partnership (RCEP) strengthens ASEAN-China ties, yet it also raises concerns about potential political leverage influencing member states’ autonomy.
The Challenge of Regional Stability
While the ASEAN-China dialogue offers a framework for promoting peace, its effectiveness is conditioned by broader geopolitical contexts, including China’s rivalry with the United States. The success of this dialogue rests on sustaining a commitment to multilateralism and peaceful dispute resolution. As ASEAN adapts to these complex dynamics, it must reinforce its unity and cooperative strategies, ensuring the region’s stability amid evolving challenges.
Source : Tug Of War In Southeast Asia: Will ASEAN-China Dialogue Tip The Balance Towards Peace? – Analysis
Asean
Cambodia Invites Business Leaders to Join the 21st China-ASEAN Expo in Nanning
Cambodia invites businesspeople to the 21st China-ASEAN Expo in Nanning, promoting trade and investment with incentives like hotel coupons and networking opportunities in various sectors.
Cambodia Invites Participation in CAEXPO 2024
Cambodia is actively encouraging business leaders, investors, and service providers to participate in the upcoming 21st China-ASEAN Expo (CAEXPO), set to take place from September 24-28 in Nanning, China. According to a Ministry of Commerce announcement, CAEXPO serves as a vital platform for trade and investment collaborations between ASEAN nations and China.
To facilitate Cambodian participation, the Ministry invites interested individuals to apply as Trade Visitors by August 31, 2024. Participants will benefit from hotel coupons, dining vouchers, and shuttle services to the expo venue. Furthermore, attendees can engage in business matchmaking in sectors such as food processing, digital technology, and renewable energy products.
Kin Phea, from the Royal Academy of Cambodia, emphasized the advancements in China-ASEAN relations, particularly concerning economic cooperation, tourism, and cultural exchanges. He noted that both sides have become each other’s largest trading partners, enhancing collaboration through the Belt and Road initiative, focusing on infrastructure and sustainable development.
Source : Cambodia encourages businesspeople to partake in 21st China-ASEAN Expo in Nanning