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China's annual corporate investment in Europe tripled last year to $10 billion and appears to be driven mostly by commercial motives, not government directives, a study released Thursday said.
Chinese companies are beginning a surge in outbound global investment that could total $2 trillion by 2020, said the report by Rhodium Group, a New York City-based research firm.
The report comes as the United States and other governments maneuver to attract investment from China but also face opposition because of questions about Chinese motives and possible security threats. Chinese companies have made a series of high-profile acquisitions in Europe over the past two years, expanding faster there than in the United States.
"Europe is experiencing the start of a structural surge in outbound direct investment in advanced economies by Chinese firms," said the report, prepared in partnership with China International Capital Corp., a government-owned investment bank, and Brunswick Group, a public relations firm.
"Our detailed data support the view that Chinese direct investment in Europe is driven overwhelmingly by commercial motives," it said. "Direct political guidance has played a very minor role in Chinese investment in Europe thus far."
Total Chinese investment in Europe, both acquiring established businesses and setting up new operations, could rise as high as $500 billion by 2020, the report said.
Most Chinese corporate acquisitions abroad go ahead unchallenged but some have faced hurdles due to security concerns.
In the United States, Chinese telecoms equipment maker Huawei Group agreed last year to unwind its acquisition of 3Leaf Group, a computer company, after the deal failed to win approval from a U.S. security panel.
Thursday's report forecast global outbound Chinese investment at up to $2 trillion over the decade through 2020.
Chinese acquisitions in Europe reflect what analysts say is a desire by fast-growing but young companies to acquire skills and technology as well as gaining access to new markets.
Last year, China National BlueStar Corp. acquired Norway's Elkem, a maker of silicon and carbon parts, for $2 billion. A conglomerate, Fosun Group, bought 7.1 percent of French tourism group Club Med in 2010 and the two companies said they would collaborate in China.
In some cases, Chinese cash has helped to rescue European companies or accelerated their global expansion.
A Chinese conglomerate, Shandong Heavy Industry Group-Weichai Group, bought a 75 percent stake in struggling Italian yacht manufacturer Ferretti Group in January. SHIG-Weichai said it would help Ferretti pay off debts and expand in China and other emerging markets.
Rhodium Group: http://rhgroup.net