European leaders disagree over China's EU investments

[News_Editor]

European leaders disagree over China's EU investments

2010-12-28 23:31:34 GMT+7 (ICT)

BRUSSELS (BNO NEWS) -- European leaders are in disagreement over limiting China's European Union investments which increased by 12 percent this year, Deutsche Welle television reported on Tuesday.

European Union industry commissioner Antonio Tajani warned EU Member States on Monday about the growing influence China has in some strategic sectors of the European economy and added that EU businesses should be protected from possible future takeovers by Chinese companies.

In 2010, China's direct investments in Europe increased by 12 percent, or 37 billion euros ($50 billion), while the EU invested a total of 3.8 billion euros ($5.1 billion) in China. The increment was the result of EU businesses which are expanding their investment from the manufacturing sector to services and other fields.

According to the EU statistical bureau Eurostat, from January to September, the EU exports to China reached 82.3 billion euros ($107.8 billion) which represented a 39 percent increase from 2009. In addition, EU imports from China were of 204.5 billion euros ($267.8 billion), increasing by 30 percent.

Commissioner Tajani added that the European Union should establish an agency to analyze acquisitions by a private or public foreign company in order to determine if it is harmful to the area, similar to the Committee on Foreign Investment in the United States.

However, not everybody agrees with Tajani's point of view. German Economics Minister Rainer Bruederle said that instead of placing excessive controls on foreign investment, the EU must maintain open markets.

The German minister rejected Tajani's proposal of a regulation agency but agreed that some examinations may be necessary to address security and public order concerns. Bruederle stressed that the EU should instead offer attractive conditions for foreign investors.

Last week, China said that it will continue investing in the EU Member States as it is an attractive market and to help the region boost its economy.

Last summer, in an example of the increasing investment of China in the EU, Chinese company Geely purchased Swedish acclaimed carmaker Volvo. Previously, China focused on investing raw materials from Latin America and Africa but lately it has changed its target to purchasing European businesses.

On Sunday, Song Zhe, head of the Chinese mission to the EU, said that the increasing activity of China in Europe was attributable to the economic complementarity of the two sides which is beneficial and fundamental to the economic recovery.

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