As the United States builds barriers, Europe is getting a cash infusion, according to a new report from law firm Baker McKenzie. The findings show that Chinese investment in Europe is now nine times higher than Chinese investment in North America.
CGTN’s Richard Bestic has the details.
With multi-million dollar investments in projects such as the Hinkley Point nuclear power station, Britain benefits from Chinese money.
It’s a similar story across much of Europe, where investments in the first half of the year reached $22 billion, according to Baker McKenzie.
In the U.S., however, regulatory hurdles and the trade war are weighing down deal making, resulting in just $2.5 billion in Chinese investment.
“The rhetoric from the Trump government is very unappealing for the Chinese,” Baker McKenzie Partner corporate partner Tim Gee said.
“They absolutely have an imperative to continue their policy of outbound investment, but they’re only going to do that when they feel they’re stepping into a situation where they’ve got long term security about the way they will be treated.”
In response to the escalating trade war, China and Europe have grown closer. Chinese Premier Li Keqiang and EU leaders met in Beijing this week, voicing joint support for free trade.
“The talk between the EU and China about reciprocal access is exactly the dialogue the Chinese respect, and that’s what’s making them feel comfortable about continuing to invest in Europe,” Gee said.
Europe benefits, at the expense of the U.S., from many high-end Chinese investments in the automotive industries, plus health and biotech, according to the report.
Gee believes the situation will get worse before it begins to improve. The U.S. and China, he says, need to “find a basis upon which they can co-exist in the global economy.”
According to Baker McKenzie, Chinese companies are also doing some financial housekeeping, selling nearly $10 billion in North America assets, with another $4 billion pending.