Foreign investment in China exceeded Chinese investment abroad in the first five months of 2020, as a result of barriers erected by states to protect themselves, according to a study by consulting firm Baker McKenzie published on Friday.
Fear that companies deemed strategic, especially in the pharmaceutical sector, will pass under the Chinese flag in favor of the recession caused by the Covid-19 pandemic, several states have tightened the rules governing direct investment abroad ( IDE).
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In particular, they lowered the equity investment thresholds from which a green light from the authorities is required.
This is the case of Australia, which has lowered this threshold to zero, but also of France (25%), Spain (10%) or Germany, which will soon be joined by the Great Brittany.
Only the United States has stood aside from this movement.
As a result, in the first five months of 2020, Chinese investment fell 93% in Europe and 89% in North America, to $ 1.4 billion and $ 700 million, respectively.
Figures to be related to foreign acquisitions in China, which reached 9 billion dollars between January and May, exceeding "
for the first time in ten years
" Chinese FDI abroad.
“
It is today Asia which constitutes the main target of Chinese appetites, with 4.3 billion dollars invested
” between January and May, specifies this study.
If "
Chinese companies with global ambitions are now facing a
much less favorable
environment
", large European and American companies for their part have increased the number of Chinese asset acquisitions for 18 months, which the study attributes to three factors.
First, they "
continue to bet on the development of the Chinese middle class
", as evidenced by the recent takeover of the Chinese food distribution group Be & Cheery by the American Pepsi for 700 million dollars.
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Then, "
the foreign companies buy back shares in their own joint companies, after the lowering in China of the thresholds of foreign participation
": Volkswagen will thus take control of its joint venture with the car manufacturer Anhui Jianghuai for 1.1 billion, all like JP Morgan of its Chinese mutual fund joint venture ($ 1 billion).
Finally, "
Chinese companies have become leaders in certain sectors
", so that, "
for the first time, it is more interesting for foreigners to buy technologies and industrial assets rather than to start from scratch
".
The case of Volkswagen, which plans to acquire 26% of battery maker Guoxuan High-Tech for $ 1.2 billion, is a good example.
