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18.01.2018

How does China squeeze the US out of the EU?

American companies are gradually leaving the European market, while the Chinese are increasingly occupying it. Direct investments from China to the EU countries have long exceeded 100 billion dollars, many key infrastructure facilities - primarily port facilities - have acquired new owners in recent years. About why this is happening and what it can lead to, - in the material of RIA Novosti.

Win the tender from the USA

A year and a half ago, COSCO Shipping, a member of the group of Chinese and Hong Kong companies COSCO Group Ltd., acquired 280,5 shares of the Piraeus port in Athens for 51 million. In the competition for this deal, the Chinese outrun five rivals, including the American investment Cartesian Capital Group, which was considered the favorite. The Greek government preferred not the professional asset manager, but the owner of the fourth largest container fleet in the world. The new managing director of the port, Fu Cheng Qiu, promised to turn it into one of the largest container hubs, and Greece to a powerful transshipment hub between Asia and Eastern Europe.

In 2017, COSCO bought for 200 million euros a controlling stake in the Spanish port holding Noatum Port Holdings, for 42 million dollars (from the Danish company Maersk) - 100 percent of the container terminal in the Belgian port of Zeebrugge. Earlier "daughter" COSCO Pacific Ltd. acquired 35 percent of the Euromax terminal in Rotterdam.

But the most loud was the deal of another Chinese consortium - CCCC, which won an idea contest for the right to build a new container terminal in one of the oldest European ports, in Hamburg. Among the shareholders of this consortium, which owns, in particular, the world's largest manufacturer of port cranes ZPMC - the richest citizen of China, Jack Ma, the owner of the company Alibaba. A new deepwater terminal will be able to service the largest modern container ships.

"In all these deals, the competitors of the Chinese were companies with American capital, and it clearly shows that European masters today are more willing to let investors into their market from China than from the US," said Dmitry Abzalov, president of the Center for Strategic Communications.

Chinese businessmen buy up in Europe not only seaports, but also other infrastructure facilities. In the same Greece, they acquired a controlling stake in the National Energy Corporation, the main electricity supply operator of the country. In the UK, China Investment Corporation bought 10 percent of Heathrow Airport, the Beijing Construction Engineering Group was granted the right to participate in the construction of the first British city-airport Manchester, and the China Harbor Engineering Company builds a tidal power station in Swansea County. Last year ChenChina Corporation acquired the Swiss agrochemical concern Sygenta, and this transaction is the largest example of the absorption by the Chinese business of the European business in history.

America is leaving in English

According to the latest data from the Berlin Institute for the Study of China (MERICS), direct Chinese investments in the European economy increased from 1,6 billion euros in 2010 to 35 billion in 2016-that is, almost 22 times. And only for 2016-th year they increased almost threefold, totaling over 16 years 100 billion euros.

In 2016, the Chinese bought or owned 309 European companies. Most Chinese money is invested in the UK (23 percent), Germany (19 percent), Italy (13 percent), France (11 percent) and Finland (7 percent). At the same time, over the past seven years, the structure of investment has changed significantly: China has invested heavily in transport infrastructure, real estate, engineering and the automotive industry.

Direct investment from the US to the European Union countries are growing much more slowly, and in other years, and at all declining. For example, in 2012-m - more than half, below the mark in 100 billion euros. The next year - another 2 percent.

"China is actively increasing its presence in Europe, this trend may not yet be very noticeable due to the continued superiority of American investors, but it certainly is," said Alexei Portansky, professor at the Department of World Economy and World Politics at the Higher School of Economics.

Chinese business comes to Europe not to an empty place - often Americans are inferior to their own. So, recently, little by little the activities in the Old World of IT companies, such as Microsoft, Apple, Google, Alphabet, Facebook, Amazon and others have been curtailed. The reasons are a toughening of the Brussels tax policy, and in some cases direct extrusion of them from the European market.

In a number of countries, a whole campaign was launched to abandon state institutions from Microsoft software - in favor of open source software. For example, the national gendarmerie of France has already replaced in its computers MS Windows on a specially adapted OS Linux. According to state officials, national security is incompatible with the monopoly of a foreign company for a software product.

And Chinese IT companies triumphantly march through Europe. The most active is Huawei, which has significantly increased and continues to increase sales of its gadgets in European countries.

Another example is the departure from Europe of the largest US consumer electronics retailer Best Buy. The corporation refused plans to build a hypermarket network and withdrew from the partnership with the European company Carphone Warehouse, selling its fifty-percent share worth 775 million dollars. According to Best Buy CEO Hubert Jolie, this will "simplify business and improve economic performance."

The new owner of the Old World

Experts emphasize: China's expansion into the European market is stimulated by the protectionist policies of the current US administration. Such steps by US President Donald Trump as a way out of the Trans-Pacific Partnership (TTP) and the Paris Agreement on Climate Change are leading not only to a reduction in US participation in the affairs of the Western world, but also to the fact that Washington's role in these matters immediately takes on itself Beijing.

"When the United States announced last summer that it was withdrawing from the Paris agreement, the remaining countries held talks to determine a joint position on this issue, and it turned out that the agreement continues to operate, but without the United States, and China has become the largest and most weighty participant ", - reminds Dmitry Abzalov.

The policy of "the return of the great America" ​​outside the United States now turns into protectionism, isolationism, the curtailment of American participation in projects and contacts that have developed rapidly under Barack Obama, Alexey Portansky asserts. And this inevitably leads to the strengthening of China's role in the world arena.

"The withdrawal of the United States from the TTP can be said to have breathed life into another global agreement - the Comprehensive Regional Economic Partnership (PEP), which is supported by Beijing and in which China's role will be very, very noticeable," says Alexei Portansky.

The agreement on the TAPP is likely to be signed this year. In parallel, Beijing has stepped up the implementation of another major project - the creation of the Asia-Pacific Free Trade Zone.

Washington's protectionism leads America out of global joint initiatives and willy-nilly creates preconditions for its self-isolation. Beijing's protectionism so far gives directly opposite results. This protectionism consists in the fact that almost all Chinese business enjoys state support, which contradicts both WTO norms and EU rules. However, it is preferable to turn a blind eye to this in the world and, in particular, in Europe.

As well as the fact that the PRC itself is extremely reluctant to let foreign companies into its territory and often forces them to leave the country. To this end, a variety of administrative levers are used, including this: all foreign missions, including Western ones, in China insistently oblige to establish the primary organizations of the Communist Party of China. But even this is not able to weaken in the eyes of Europe the attractiveness of Chinese investment - the big money that the Celestial Empire readily invests in any promising large-scale projects. American companies are gradually leaving the European market, while the Chinese are increasingly occupying it. Direct investments from China to the EU countries have long exceeded 100 billion dollars, many key infrastructure facilities - primarily port facilities - have acquired new owners in recent years. About why this is happening and what it can lead to, - in the material of RIA Novosti.

Win the tender from the USA

A year and a half ago, COSCO Shipping, a member of the group of Chinese and Hong Kong companies COSCO Group Ltd., acquired 280,5 shares of the Piraeus port in Athens for 51 million. In the competition for this deal, the Chinese outrun five rivals, including the American investment Cartesian Capital Group, which was considered the favorite. The Greek government preferred not the professional asset manager, but the owner of the fourth largest container fleet in the world. The new managing director of the port, Fu Cheng Qiu, promised to turn it into one of the largest container hubs, and Greece to a powerful transshipment hub between Asia and Eastern Europe.

In 2017, COSCO bought for 200 million euros a controlling stake in the Spanish port holding Noatum Port Holdings, for 42 million dollars (from the Danish company Maersk) - 100 percent of the container terminal in the Belgian port of Zeebrugge. Earlier "daughter" COSCO Pacific Ltd. acquired 35 percent of the Euromax terminal in Rotterdam.

But the most loud was the deal of another Chinese consortium - CCCC, which won an idea contest for the right to build a new container terminal in one of the oldest European ports, in Hamburg. Among the shareholders of this consortium, which owns, in particular, the world's largest manufacturer of port cranes ZPMC - the richest citizen of China, Jack Ma, the owner of the company Alibaba. A new deepwater terminal will be able to service the largest modern container ships.

"In all these deals, the competitors of the Chinese were companies with American capital, and it clearly shows that European masters today are more willing to let investors into their market from China than from the US," said Dmitry Abzalov, president of the Center for Strategic Communications.

Chinese businessmen buy up in Europe not only seaports, but also other infrastructure facilities. In the same Greece, they acquired a controlling stake in the National Energy Corporation, the main electricity supply operator of the country. In the UK, China Investment Corporation bought 10 percent of Heathrow Airport, the Beijing Construction Engineering Group was granted the right to participate in the construction of the first British city-airport Manchester, and the China Harbor Engineering Company builds a tidal power station in Swansea County. Last year ChenChina Corporation acquired the Swiss agrochemical concern Sygenta, and this transaction is the largest example of the absorption by the Chinese business of the European business in history.

America is leaving in English

According to the latest data from the Berlin Institute for the Study of China (MERICS), direct Chinese investments in the European economy increased from 1,6 billion euros in 2010 to 35 billion in 2016-that is, almost 22 times. And only for 2016-th year they increased almost threefold, totaling over 16 years 100 billion euros.

In 2016, the Chinese bought or owned 309 European companies. Most Chinese money is invested in the UK (23 percent), Germany (19 percent), Italy (13 percent), France (11 percent) and Finland (7 percent). At the same time, over the past seven years, the structure of investment has changed significantly: China has invested heavily in transport infrastructure, real estate, engineering and the automotive industry.

Direct investment from the US to the European Union countries are growing much more slowly, and in other years, and at all declining. For example, in 2012-m - more than half, below the mark in 100 billion euros. The next year - another 2 percent.

"China is actively increasing its presence in Europe, this trend may not yet be very noticeable due to the continued superiority of American investors, but it certainly is," said Alexei Portansky, professor at the Department of World Economy and World Politics at the Higher School of Economics.

Chinese business comes to Europe not to an empty place - often Americans are inferior to their own. So, recently, little by little the activities in the Old World of IT companies, such as Microsoft, Apple, Google, Alphabet, Facebook, Amazon and others have been curtailed. The reasons are a toughening of the Brussels tax policy, and in some cases direct extrusion of them from the European market.

In a number of countries, a whole campaign was launched to abandon state institutions from Microsoft software - in favor of open source software. For example, the national gendarmerie of France has already replaced in its computers MS Windows on a specially adapted OS Linux. According to state officials, national security is incompatible with the monopoly of a foreign company for a software product.

And Chinese IT companies triumphantly march through Europe. The most active is Huawei, which has significantly increased and continues to increase sales of its gadgets in European countries.

Another example is the departure from Europe of the largest US consumer electronics retailer Best Buy. The corporation refused plans to build a hypermarket network and withdrew from the partnership with the European company Carphone Warehouse, selling its fifty-percent share worth 775 million dollars. According to Best Buy CEO Hubert Jolie, this will "simplify business and improve economic performance."

The new owner of the Old World

Experts emphasize: China's expansion into the European market is stimulated by the protectionist policies of the current US administration. Such steps by US President Donald Trump as a way out of the Trans-Pacific Partnership (TTP) and the Paris Agreement on Climate Change are leading not only to a reduction in US participation in the affairs of the Western world, but also to the fact that Washington's role in these matters immediately takes on itself Beijing.

"When the United States announced last summer that it was withdrawing from the Paris agreement, the remaining countries held talks to determine a joint position on this issue, and it turned out that the agreement continues to operate, but without the United States, and China has become the largest and most weighty participant ", - reminds Dmitry Abzalov.

The policy of "the return of the great America" ​​outside the United States now turns into protectionism, isolationism, the curtailment of American participation in projects and contacts that have developed rapidly under Barack Obama, Alexey Portansky asserts. And this inevitably leads to the strengthening of China's role in the world arena.

"The withdrawal of the United States from the TTP can be said to have breathed life into another global agreement - the Comprehensive Regional Economic Partnership (PEP), which is supported by Beijing and in which China's role will be very, very noticeable," says Alexei Portansky.

The agreement on the TAPP is likely to be signed this year. In parallel, Beijing has stepped up the implementation of another major project - the creation of the Asia-Pacific Free Trade Zone.

Washington's protectionism leads America out of global joint initiatives and willy-nilly creates preconditions for its self-isolation. Beijing's protectionism so far gives directly opposite results. This protectionism consists in the fact that almost all Chinese business enjoys state support, which contradicts both WTO norms and EU rules. However, it is preferable to turn a blind eye to this in the world and, in particular, in Europe.

As well as the fact that the PRC itself is extremely reluctant to let foreign companies into its territory and often forces them to leave the country. To this end, a variety of administrative levers are used, including this: all foreign missions, including Western ones, in China insistently oblige to establish the primary organizations of the Communist Party of China. But even this is not able to weaken in the eyes of Europe the attractiveness of Chinese investments - a lot of money, which the Celestial Empire readily invests in any promising large-scale projects.

A source: VIM

Author: Vladimir Arda

Tags: American companies, Chinese companies, China, USA, Protectionism,

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