Recently, reports on the sharp decline in Chinese companies’ investment and acquisitions in Europe have attracted public attention. This is of course a business operation of enterprises. The number of investments is also in line with the general economic laws. However, the author believes that local economic activities and Central Europe and China and Germany Many related factors of the overall relationship are also worth observing.
China has invested in Europe on a relatively large scale, especially in Germany. It has been a direct investment for nearly 15 years, and its growth rate has been continuously improved. It was initially welcomed and encouraged by the German and European business communities and the government, but the workers have concerns and worry about Chinese companies. It will transfer the Chinese management system model and damage the interests of local workers. In 2008, when Deo was in financial crisis, there was a joint effort between the government and enterprises to invite China to invest, and to try to resolve the situation of local labor and society’s investment in Chinese enterprises, especially in the acquisition. It can be said that at the time, the mainstream of the European Union Presenting an unprecedented “friendly state” and “welcome culture”. A person in charge of the German Trade Union Confederation once told the author that several years of practice have shown that Chinese companies generally adhere to the German corporate system after entering the country, and even retain all employees, do not interfere with corporate management, and bring Chinese market opportunities to corporate products. , welcomed by the workers. The American boss came to change management immediately, and then sold the company to a high price and then sold it at a high price.
The situation has changed significantly around 2016. With the continuous increase in the number of Chinese-funded M&A investments in Germany and the United States (the number of acquisitions in Germany in some years even exceeds that of the United States), local society and public opinion have also increased rapidly, and there has been politicized hype, and some European media have even rendered “Huanglong”. To buy Europe, China will surpass Europe by acquiring European technology, and even claim that China’s acquisition is threatening Germany and Europe in technology and technology. The media continues to negatively speculate, creating a growing atmosphere of doubts and fears for Chinese companies in Europe and Germany. The politicians are involved in China’s “acquisition threat theory” and the United States has continued to intervene in Chinese investment. Some so-called sensitive technology companies have put pressure on some European governments. In the process, the governments of Germany and other countries in the country, while also promoting the introduction of policy measures in the EU, impose restrictions on Chinese companies’ mergers and acquisitions and investment activities in Germany and Europe. Political opinions and decisions further strengthened Ou De’s fear of Chinese capital. Although the economy as a whole, especially the majority of enterprises, still welcomes the participation of Chinese companies. However, it can be noted that Chinese investment in Germany has a significant downward trend compared to other European countries. According to the statistics of Ernst & Young, the direct investment of Chinese enterprises in Germany has dropped sharply from 68 in 2016 to 35 in 2018, which is far greater than the direct investment of Chinese companies in other European countries.
It should also be noted that the decline in the number of direct investment by Chinese-funded enterprises in Germany and Europe is closely related to China’s domestic economic trends, economic policy adjustments and the company’s own business strategy and status quo. On the one hand, after experiencing the “gold rush”, enterprises are more rational when they choose investment targets, and relevant policies of the government to introduce foreign investment are beginning to take effect. On the other hand, with the rising labor costs in China and the increasing pressure on domestic and international markets, Chinese companies are paying more attention to refining internal strengths, improving production efficiency, product quality and management level. The overall quality and strength of enterprises are constantly improving. The demand for M&A to upgrade itself is relatively weak, and the comprehensive elements of market, resources and technology are more systematically considered when selecting investment targets. The auto parts and accessories companies that I have recently researched have shown a global perspective and confidence in technology, products and management. An expert who specializes in M&A in China and Europe introduced that in the past few years, some German companies have been paying high prices for Chinese companies with M&A intentions. Now it is difficult to find buyers from China at half the price. The general manager of Shanghai Xianhui Automation Technology Co., Ltd., which is based in Shanghai and has long been concerned about the Sino-German Sino-European auto parts market, said that the technology gap between China and Europe is shrinking. The technology of domestic enterprises has been able to provide some technical support for production in Europe. When the company is investing in Europe. It will comprehensively plan the advantages of both sides of China and Europe and will not blindly invest in Europe unilaterally.
The unprecedented destructive power of the Trump administration has damaged the global economy. In the face of unprecedented uncertainties, the foundations of market economic regulations and practices that were once generally considered to be effective are being disintegrated, and corporate investment confidence is generally compromised. It also affects the willingness and actions of Chinese companies to invest overseas. It should be noted that this is a huge challenge facing the current world economy and a “difficulties” faced by China and Germany and Europe. The first priority is to maintain and restore business confidence in the rules of the global economy. In this regard, the Chinese and German governments and the society should have sufficient understanding and consensus, and create a better legal framework and social atmosphere for economic cooperation including China and Europe, including corporate investment, including the early establishment of a comprehensive system for China-EU two-way investment. Arrange and so on. In addition, the media should not help in the process, out of the “people bite the dog is the news” cycle, have the courage to introduce the successful cases of business cooperation between the two sides.
It should be believed that the current status of “US priority” undermining the global economic order and harming others is unsustainable. The vitality of Sino-German enterprises in China and Europe will not be permanently suppressed. With the improvement of the global economic environment in the future, the excellent market in China, Germany and Central Europe remains. It will attract mutual investment between the two companies. For the growing Chinese companies, Europe still has a good investment space, and the joining of Chinese companies will further enhance the vitality of German and European companies and bring them to China, the world’s largest consumer market. . To this end, all parties should focus on the long-term, based on reality, and intensive work.
Economic relations, including corporate direct investment, are the basis for the comprehensive relationship between China and Europe and China and Germany. They are also the result of the joint efforts of various fields and the overall relationship. The sustained and healthy economic relationship requires the benign companionship and promotion of all aspects. It should be noted that good economic and trade relations are not only “personality” behaviors between enterprises, but also natural things that require the care of all parties. At present, mutual strategic and social trust is still an urgent issue to be resolved in the face of China and Europe.