Skip to main content

How China is double worried about Eurozone crisis

On one hand, China's 5.6% GDP comes from exports to Europe.

On the other hand,  Chinese investment is pouring into Europe. It's one reason why Premier Li Keqiang, during a visit to Brussels this week, called for a strong euro and united Europe as the region grapples with the latest chapter in the Greek debt saga.
From Cyprus to Sweden and almost most everywhere in between, Chinese companies are buying European assets like never before. Europe is increasingly popular for China's corporate titans as they shift from buying in resource-rich developing countries to advanced economies.
Here are the numbers: Annual investment by Chinese companies into European Union member states has surged from around zero in the mid 2000s to 14 billion euro in 2014, according to a new report by Rhodium Group and the Mercator Institute for China Studies. And it's set to grow as China -- with almost $4 trillion in foreign currency reserves and $21 trillion in savings -- opens its capital account.


In the period from 2000 to 2014 there were more than 1,000 Chinese greenfield projects and acquisitions in the EU worth more than 46 billion euro. The most sought after sectors include food, real estate, energy and automotive.
"We are entering a new era of Chinese capital,"  said the report's authors Thilo Hanemann and Mikko Huotari.


Demand is being driven by private companies and investors from China's east coast provinces, a departure from times past when government-owned conglomerates dominated foreign investment. That shift reflects broader changes as China makes room for the private sector and encourages companies to expand overseas.
The European investments are spread across the region with more than 50 percent having gone into the UK, Germany and France. Asset purchases in Portugal, Ireland, Italy, Greece, Spain and Cyprus have risen from 10 percent of the total before 2011 to over 30 percent between 2012 and 2014.


The wave of cash will pose a challenge for European politicians as they balance receiving much needed investment with likely criticism of China's political system and lack of transparency, the report's authors said.
The investment "boom will be the first test case for EU leaders’ ability to respond to the new era of Chinese capital," said the report's authors.

Ref:
http://www.pragcap.com/europes-contagion-into-china
http://www.bloomberg.com/news/articles/2015-06-30/why-china-wants-a-strong-euro-as-greece-teeters

Comments

Post a Comment

Popular posts from this blog

Best IELTS and English language training institutions in Hyderabad

IELTS stands for International English Language Testing System. As the name implies it is basically an English test for testing the proficiency of the language in an individual.  Training for IELTS can be taken to pass the IELTS exam or to develop good english language skills. I am giving the training institute addresses for Hyderabad. The test system is jointly managed by the British Council,IDP education ltd and University of Cambridge ESOL Examinations and more than 1 million candidates are taking the exam all over the world. The test has two versions : 1. Academic 2. General training Academic  version is for people who plan to continue their higher education by enrolling in universities in countries like US,UK,Australia,Canada,New Zealand etc.The academic institutions in these countries consider the IELTS score as a criteria for the admission process. General training is mostly for immigration purposes in countries like Australia,New Zealand,Canada etc. It may ...
9 comments
Read more

How to use home loans most effectively for tax benefits

1) Deduction on interest: If you are paying EMIs for a home loan you took to buy a house, the interest component in the EMI can be claimed as deduction. You must be both an owner and a co-borrower (in the loan) to claim tax benefits. This deduction can be claimed starting the year in which the construction of the house is completed. Suppose the construction of your house was completed on August 30, 2014, you can claim deduction for interest for the entire 12 months in financial year 2014-15. So every year a maximum of Rs. 2 lakh can be claimed for a house that you use for your own residence. If your house is rented, the entire interest for the year can be claimed as deduction. The interest payments for the year shall result in a loss under the head 'income from house property'. This loss can be adjusted against in the same year against other heads of income in your income tax return including salary. Therefore, it reduces your total taxable income and the tax you pay thereon. A...
2 comments
Read more

Intellectual battle against ISIS as important as Military: Sheikh Makhtoum of Dubai

The global financial crisis taught the world how profoundly interdependent our economies have become. In today's crisis of extremism, we must recognize that we are just as interdependent for our security, as is clear in the current struggle to defeat ISIS. Mohammed bin Rashid Al Maktoum, VP and prime minister of the UAE, ruler of Dubai If we are to prevent ISIS from teaching us this lesson the hard way, we must acknowledge that we cannot extinguish the fires of fanaticism by force alone. The world must unite behind a holistic drive to discredit the ideology that gives extremists their power, and to restore hope and dignity to those whom they would recruit. ISIS certainly can – and will – be defeated militarily by the international coalition that is now assembling and which the UAE is actively supporting. But military containment is only a partial solution. Lasting peace requires three other ingredients: winning the battle of ideas; upgrading weak governance; and ...
Post a Comment
Read more