Investissement chinois en Europe (document en anglais)

I. INTRODUCTION

The winds of globalization has turned, and China benefits. For a long time, it has played a subcontractor role for European and American companies who have fired their employees to relocate their production. On contact with its MCNs, China has learned a lot, and earned 2800 billion € in exchange reserve. An amount, which in theory, allows her to buy 25% of euro zone GDP. Years after years, China establishing in Europe and positioning in solution to the financial crisis. She relocates, saves bankrupt companies, win public contracts and creating jobs in Sweden, France, Poland and Greece. If Chinese companies recover European technology and industrial equipment, they also bring their expertise and strict working methods, sometimes at the cost of the Labor Code.

I. FLOWS ROSE SHARPLY

In 2011, Chinese investment in Europe represented 11 billion euros. A water drop which grows every year. An huge increase for annual investments which represented less than 1 billion before 2010. For the first time, Europe represented 34% of Chinese FDI, against 10% in 2010, and is ahead of Asia with 27% and North America with 21%. On the other hand, the total investment in the United States has only risen to 6.5 billion in 2011.

If European companies traditionally invest more in China than the other way, the trend has been reversed for the first time in the first half of 2012: Chinese companies have made 30 investments in Europe, against 26 investments in China by European companies. In value this discrepancy exists since 2011, as the Chinese have invested $ 11 billion in Europe, against 7 billion invested by Europeans in China. France became in 2011 the first European investor in China and the third recipient country for Chinese investors.

II. WHO ARE THEY ?

Chinese investors in Europe are first: the Sovereign Wealth Funds of the Chinese government, through two rich structures of hundreds billions dollars and which have as objectives to develop Chinese FDI: mainly CIC (China Investment Corporation) created in 2007 but also the SAFE (State Administration of Foreign Exchange). Then you find corporate investor from the industrial sector (still two-thirds of state) and private Chinese wealth (1.43 million of Chinese are dollar millionaire which is 7 times more than in France – 200 billion; and 3 times less than in USA - 5.13 billion)

III. WHERE ARE THEY INVESTING?

Chinese companies investing in Europe through acquisitions or stakes in all industrial sectors, including strategic. Among the largest operations in recent years, we can note the acquisition by the CIC of a 30% share of the GDF Suez exploration and production division for $ 3.2 billion. At the same time the French group has signed an agreement for the sale of liquefied gas.

In Norway, Elkem a producer of polysilicon (a component of solar panels) was acquired at 100% for $ 2.3 billion by the chemical company Bluestar. In Poland, it’s the civilian activities of a military-industrial group which were taken by civil engineering company Liu Gong.

German industries, which are the model for all the Old Continent, are on the frontline. In 2011, the Chinese were the first foreign investors in Germany, ahead of the Americans, Swiss and French. By buying Putzmeister - one of the largest manufacturer of concrete pumps - for half of a billion € (one of the largest transaction carried out by a private group), China is competing Germany on one of its strong points.

In less than five years, the Chinese companies became essential for the development of European industry. The crisis of 2008 was a turning point. The liberal model and European financial weakness put European industry as a potential prey. However, the power in the best position to take advantages of this opportunity is China. Chinese firms looking for both expertise but also access to new markets are indeed often the only buyers driven by an industrial strategy, and able to invest.

CASE : VOLVO AND SAAB IN SWEDEN

In 2009, the acquisition of the Swedish automobile pride - Volvo - by Geely, a Chinese carmaker, had been received as an outrage. Ford sold Volvo to Geely that was the only alternative to save the brand. Geely took control of Volvo for $ 1.8 billion and re-capitalized it for 900 million $. Since, production has not been relocated. There have been no layoffs, but instead of hiring. In 2011, sales have increased of 23% and Volvo has renewed to growth.

Geely did not succeed to settle in the world due to a disastrous image. Geely cars did not pass the crash test, and were flunked by U.S.A and Europe; they became the laughingstock of professionals. With Volvo, Geely gets a new reputation. Instead of Geely, the Swedish highlight their crash test. Security is part of their brand image: Safety - Quality - Respect the environment.

Geely has 20 years of existence. Thanks to her, Volvo was able to launch three factory’s projects in China and market is widely open. It would be impossible without the financial and political power of Geely, because foreign companies are subject to complex and lengthy procedures. Moreover, Geely left more independence to Volvo than when Ford was the owner. Today, Volvo wants launch a new brand in China. A R&D center was established in Shanghai and in Chengdu a plant is expected to open in 2013. Despite the debate at the start, the case is now considered as a success.

On the other hand Saab, another great Swedish automobile company, could not be redeemed by Chinese at the same period. The Saab owner, the American industrial General Motors has vetoed all offers; he wouldn’t w sell the patents. Consequences today: Bankruptcy of the brand and redundancy.

IV. INVESTMENT IN FRANCE

The France also benefits from the Chinese wave. The fund China Investment Corporation (CIC), has acquired 7% of Eutelsat, the satellite communications specialist for 484 million dollars. But before Eutelsat, the Chinese have bought Marionnaud, Rhodia or the PC division of IBM. They also acquired stakes in the company Edmond de Rothschild, Total, L'Occitane and the Club Med. Not to mention the investment in French vineyards. Certainly, they caused a rough debate but are still slight. There are 8,000 wineries in Bordeaux. And Chinese investors have 24 so far.

CASE : MOTEUR BAUDOUIN IN FRANCE

First case of a Chinese recovery of French industrial SMEs in a context of receivership, Baudouin Engines lived this difficulty shock in 2009. However, four years later, it is a success.

The buyer, Weichai a "heavy"

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