China Watch Blog has learnt that China’s outbound foreign direct investment could hit the $2-trillion mark by 2020, with the private sector playing an important role as mainland investors eye the cheap ‘bargains’ in the US and Europe as recession bites the world.
According to a report by US-based research firm Rhodium Group, if Europe continues to attract the same share of global FDI as in the previous decade – around 25 percent – then Europe would see $250-500 billion in new Chinese M&As and green-field investment by 2020.
In partnership with China International Capital Co Ltd, Rhodium Group released the report on China’s investment in Europe on Thursday in Brussels.
With the huge economic and employment impacts of China’s upcoming surge in overseas investment, the authors urged European countries to keep their economies open in order to maximize the benefits of the Chinese inflows, the China Daily reported.
The report was released amid speculation that the European Union is preparing to resort to protectionist measures against Chinese telecom investors.
The report’s author, Daniel Rosen, said that 63 percent of Chinese investment in Europe comes from private companies.
So far, the top five Chinese private investors in Europe are Geely, Huawei, Lenovo, Sany and Wolong Group.
China started to encourage its enterprises to invest overseas a decade ago, but the pace only started to pick up in the past couple of years.
“Europe must not risk losing its hard-earned reputation for openness by imposing additional barriers to capital inflows based on economic security considerations,” the report said. “Several cases have already raised that specter.”
Europeans will embrace foreign investment if a thorough, EU-wide process to address concerns is in place, guided by the principles of openness and non-discrimination, said the report.
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