China branches out into Europe to 'acquire technology and advance management'
China want to secure its export market share abroad, particularly in Europe as the continent provides favorable investment conditions, Professor Joseph Cheng, from the Hong Kong City University told RT.
Their aim, the political analyst argues is to acquire technology
and advance management techniques so that the state sector can
improve through facing broad competition.
RT:It's not only private billionaires who are rushing
for Europe, but state firms too. Why now? What's changed?
Joseph Cheng: China has a very big war chest amounting to
more than $3.2 trillion. Most of this money has been invested in
US treasury bills with very low returns and the danger of
depreciation. So it is natural for Chinese investors to branch
out into Europe. Secondly Europe has been more generous in terms
of technology transfer with less reservation based on strategic
considerations. Finally Chinese exporters would like to expand
their operation to Europe upstream and downstream to maintain and
even expand their market share. This is a good time because
prices are low and inexpensive because of financial difficulties
in Europe.
RT:EU companies have long complained that when they do
business in China, the government unfairly supports domestic
producers - forcing Westerners out of business. Is it more
difficult to do business in China than in Europe?
JC: Not exactly, certainly China is finding it quite easy
investing in Europe and in developed countries. Sometimes they
also get their fingers burned because of inexperience and also
because they do not appreciate, they do not understand the
Western operating style.
RT:What is it like if you’re a businessman outside
china, trying to do business within China; I gather that the
Chinese government supports its domestic producers over the
foreign incomers. Is that not true?
JC: Yes. China has a broad definition of state sectors and
the major state-owned enterprises are kind of reluctant to
entertain competition from foreigners.
RT:So it is not a level playing field?
JC: Yes, because China is yet to be fully participating in
the global market. It is still in the process of opening up.
RT:Economic growth in China, while still impressive,
is slowing. Are we going to see less investment abroad because of
that?
JC: No, China has enough reasons to invest abroad for the
reasons I’ve just explained. They want to maintain their
export market share. They want to acquire technology and advance
management. At the same time China is opening up very slowly
because the authorities also understand that the state sector
needs to face stiffer competition in order to improve.
The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of RT.