{"id":206594,"date":"2018-04-24T16:03:35","date_gmt":"2018-04-24T23:03:35","guid":{"rendered":"https:\/\/chinadigitaltimes.net\/?p=206594"},"modified":"2021-02-22T15:16:11","modified_gmt":"2021-02-22T23:16:11","slug":"concern-mounts-over-deepening-chinese-investment-in-europe","status":"publish","type":"post","link":"https:\/\/chinadigitaltimes.net\/2018\/04\/concern-mounts-over-deepening-chinese-investment-in-europe\/","title":{"rendered":"PRC Investment in Europe Raises Concerns"},"content":{"rendered":"
As Beijing continues its Belt and Road Initiative<\/a> (BRI) and global influence campaign<\/a>, criticism has recently turned towards<\/a> Chinese investment in Europe, with leaders debating how best to respond to China’s growing ownership of critical infrastructure and equity in foreign firms, and the political influence that this entails.<\/a> Of the 25 Chinese firms who have invested the most in Europe in the last decade,\u00a0just nine were privately-owned,<\/a> and even they are closely aligned with the CCP. Much as\u00a0the BRI has been criticized \u00a0as a vehicle to expand Chinese power abroad<\/a>, investment in Europe is starting to be scrutinized for harboring similar motives, especially when in critical infrastructure.\u00a0Bloomberg’s Andre Tartar, Mira Rojanasakul, and Jeremy Scott Diamond report on the pan-European scope of Chinese investment:<\/a><\/strong><\/p>\n China has bought or invested in [European] assets amounting to at least $318 billion over the past 10 years. The continent saw roughly 45 percent more China-related activity than the U.S. during this period, in dollar terms, according to available data.<\/p>\n The volume and nature of some of these investments, from critical infrastructure in eastern and southern Europe to high-tech companies in the west, have raised a red flag at the European Union level. Leaders that include German Chancellor Angela Merkel and French President Emmanuel Macron are pressing for a common strategy to handle China\u2019s relentless advance into Europe, with some opposition from the EU\u2019s periphery.<\/p>\n We analyzed data for 678 completed or pending deals in 30 countries since 2008 for which financial terms were released, and found that Chinese state-backed and private companies have been involved in deals worth at least $255 billion across the European continent. Approximately 360 companies have been taken over, from Italian tire maker Pirelli\u00a0to Irish aircraft leasing company Avolon Holdings Ltd., while Chinese entities also partially or wholly own at least four airports, six seaports, wind farms in at least nine countries and 13 professional soccer teams. [Source]<\/strong><\/a><\/p><\/blockquote>\n Beijing has courted EU countries at the historic terminus of the Silk Road for BRI investment opportunities using own political bodies such as the “16+1.”<\/a> These countries, as well as others on the European perimeter, appear to have been chosen due to their suffering the brunt of the European debt crisis, and their less than ardent subscription to the Western political model, some having expressed distaste with the EU and it’s strings-attached subsidies. Because of these factors, they are more likely to accept the promise of cheap investment and to align themselves with Beijing politically.\u00a0Christopher Cermak of Handelsblatt writes of Hungarian President Viktor Orban’s new friendship with Beijing:<\/strong> <\/a><\/p>\n Mr. Orban has some reason to cozy up to China. Unlike his EU allies to the west, where politicians have threatened more than once to cut subsidies over the Hungarian leader\u2019s autocratic tendencies and a refusal to accept refugees, China is happier to offer billions in investment with fewer questions asked. In return, some EU diplomats in Budapest say Hungary has already begun aligning itself with Beijing on international issues. \u201cWe view that with concern,\u201d said one such source. Similar worries have been expressed about Greece, which has lobbied for Chinese investment, and in June vetoed a joint EU statement condemning human rights violations in China in the UN Human Rights Council.<\/p>\n As part of this week\u2019s summit, the China Development Bank promised $2 billion for infrastructure projects in Eastern Europe. Another \u20ac1 billion will be invested in joint projects. That includes a \u20ac2.1-billion railway line from Budapest to Belgrade. Hungary hopes the railway line will make it a hub for goods running from China to central Europe down to the Balkans. The country already imported \u20ac4.4 billion worth of goods from China in 2016. In a speech, Mr. Orban called it a \u201cwin-win\u201d situation for both countries. And from his perspective, it doesn\u2019t hurt that the project would allow Hungary to proclaim a measure of independence from subsidies from the European Union. Poland, helmed by another right-leaning government, has been another key beneficiary of Chinese investment, including a highway and two new power plants. There\u2019s also plans for expanded rail connections in Slovakia. [Source]<\/a><\/strong><\/p><\/blockquote>\n In the Czech Republic, a close relationship between the president’s office and an opaque Chinese business has led to accusations of malign influence. Ivana Kar\u00e1skov\u00e1 of the Association for International Affairs writes in a report by ChinfluenCE:<\/strong><\/a><\/p>\n [Czech President] Milo\u0161 Zeman is singularly the most vocal pro-Chinese voice in the Czech public discourse \u2013 and thanks to his position, he can also be considered the most influential. A self-assigned chief polemic of the Czech political scene, he has made the transformation of Czech-China relations one of his grand foreign policy goals.<\/p>\n Beyond proclamations, the Czech president appointed Chinese national Ye Jianming, a recently deposed chairman of CEFC China Energy Company Ltd. with alleged links to the Chinese state and even by some to its military intelligence, to be his special economic advisor on China. Zeman\u2019s new approach became most clearly evident during the visit of Chinese President Xi Jinping to Prague in March 2016: while the Czech police largely ignored aggressive behavior of Chinese demonstrators, who apparently acted in collaboration with the PRC\u2019s embassy, it harassed Czech citizens who dared express their opposition to the visit, going as far as trying to prevent university students from displaying a Tibetan flag on academic grounds. Moreover, following a meeting between three Czech ministers and the Dalai Lama, the president Milo\u0161 Zeman, the prime minister, speaker of the Chamber of Deputies, and speaker of the Senate published a statement in which they expressed their respect for China\u2019s territorial integrity. As it later turned out, the statement was preceded by a visit of China\u2019s Ambassador Ma Keqing at the Prague Castle. [Source]<\/a><\/strong><\/p><\/blockquote>\n In 2015, CEFC and Ye appeared in the Czech Republic seemingly out of nowhere, acquiring stakes in an airline, and buying a brewery, a media company, a soccer club, and real estate<\/a>. The media company in question, Empresa Media, owns the TV channel TV Barrandov, which subsequently began praising President Zeman and publishing pro-China articles.<\/a> Writing in February for Project Sinopsis on CDT, Martin H\u00e1la sheds light on Ye and his company’s motivations:<\/strong><\/a><\/p>\n Chairman Ye may be elusive about CEFC\u2019s origins, but he\u2019s quite straightforward about its current course: \u00a0\u201cWe closely follow the national strategies,\u201d he declared in the Fortune interview. \u201cSo we\u2018ll map out our corporate strategy according to the national ones.\u201d This sounds true in more than one sense.<\/p>\n In a recent profile<\/a>, Financial Times described the company\u2019s ties to the Chinese political establishment: \u201cCEFC is no ordinary private company. Ye Jianming, the group\u2019s chairman, sponsors a pro-China think tank with ties to retired military intelligence officers, and does business with the military\u2019s \u2018princeling\u2019 elite.\u201d [Source]<\/strong><\/a><\/p><\/blockquote>\n The head of CEFC’s pro-China think tank, Patrick Ho, was arrested in New York on bribery charges amounting to $2.9 million, involving both the President of Chad, and the Ugandan Minister of Foreign Affairs, (Listen to a Planet Money podcast with NPR’s Rob Schmitz and Julia Simon<\/a> to learn more.)\u00a0Ye was himself detained by Chinese authorities this March, later relinquishing his CEFC stake and standing down<\/a>.<\/p>\n Chinese influence is not just limited to Europe’s periphery. In 2016 Greece sold its largest port to the Chinese firm COSCO for a quick cash injection, the next year blocking EU criticism of China’s human rights record at the U.N. Human Rights Commission.<\/a> Spain, Italy, and Belgium have since also sold COSCO their ports.<\/a> China’s car manufacturer Geely bought a 10% stake in Germany’s Daimler<\/a> just weeks after Daimler’s subsidiary Mercedes-Benz drew Beijing’s ire for posting a Dalai Lama quote on its Instagram page.<\/a><\/p>\n European governments have so far responded with warnings to Beijing. This January French President Emmanuel Macron criticized China over its conduct with Central and Eastern European nations when on a state visit, <\/a>calling for greater transparency in its BRI investment, and a more equal deal for the EU in investment opportunities. Though China frequently proclaims the BRI is about “win-win” cooperation, the gains so far appear asymmetrical–89% of contractors are Chinese firms.<\/a> In 2017 Nepal and Pakistan<\/a> pulled out of BRI projects, citing a lack of transparency and fairness in the tender process.<\/p>\n Last week, 27 of the 28 EU Nations’ Ambassadors submitted a report critical of the BRI<\/a>, stating it “runs counter to the EU agenda for liberalizing trade and pushes the balance of power in favor of subsidized Chinese companies.” Notably, Hungary’s ambassador did not sign the report.<\/p>\n However, there is still no concrete EU policy on Chinese investment. MERICS’ paper Authoritarian Advance proposes a few recommendations, including:<\/strong><\/a><\/p>\n Europe needs to better leverage the collective weight of EU member states. <\/strong>Larger member states like Germany and France need to take serious steps towards putting their privileged bilateral relations with China in the service of common European interests. Complaining about the 16+1 format China uses to The EU needs to continue providing alternatives to (the promises of) Chinese investments in European countries.<\/strong> Brussels can point to the fact that by far the most investment within the EU and its periphery still comes from within Europe. In the vast majority of instances, EU funding still is much more attractive for EU member states than Chinese money. However, the EU also needs to implement measures to align BRI investments in its neighborhood with European interests. This includes enabling third countries to properly evaluate, monitor, and prepare large-scale infrastructure projects, including those financed by China.<\/p>\n The EU and its members need to bolster a flexible set of investment screening tools.<\/strong> Europe must be able to stop state-driven takeovers of companies that are of significant public interest. In addition to high-tech sectors as well as key parts of public infrastructure, this notably includes the media as an institution of critical importance to liberal democracies. In addition, foreign funding of political parties from outside Europe, including from China, should be\u00a0banned across the EU. [Source]<\/strong><\/a><\/p><\/blockquote>\n Aside from using the BRI and European investment for its foreign policy objectives, Beijing has also been criticized for attempting to leverage the Chinese diaspora,<\/a> and Confucius Institutes,<\/a> to control debate on China abroad, while\u00a0Australia has proposed laws calling for transparency of foreign actors and donations,<\/a> after concern over Chinese buying of influence in its domestic politics.<\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" As Beijing continues its Belt and Road Initiative (BRI) and global influence campaign, criticism has recently turned towards Chinese investment in Europe, with leaders debating how best to respond to China’s growing ownership of critical infrastructure and equity in foreign firms, and the political influence that this entails. Of the 25 Chinese firms who have […]<\/p>\n","protected":false},"author":1055,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":"","_links_to":"","_links_to_target":""},"categories":[116,14744,14745,14746,5805,100],"tags":[17802,17613,7575,415,634,1201,2898,67,5987,17502,2946,17795,1775,17800],"class_list":["post-206594","post","type-post","status-publish","format-standard","hentry","category-world","category-level-2-article","category-level-3-article","category-level-4-article","category-main","category-politics","tag-belgium","tag-belt-and-road-initiative","tag-czech-republic","tag-europe","tag-european-union","tag-foreign-investment","tag-foreign-policy","tag-france","tag-germany","tag-global-influence","tag-greece","tag-hungary","tag-italy","tag-poland","et-doesnt-have-format-content","et_post_format-et-post-format-standard"],"yoast_head":"\n\n
\ninteract with smaller EU members in Central and Eastern Europe while engaging in 1+1 formats with Beijing will not help to come up with a collective EU response on issues where Chinese action fails to resonate with shared European interests.<\/p>\n