[W]ith the 2010 European crisis, China has indeed started to shift its foreign investment focus from mostly natural resources-related investments in Africa, Asia and Latin America, towards assets in European countries that, at the height of the crisis, were often faced with the need to privatize quickly and at relatively cheap price (figure 3). In Italy, the FT reports that at the end of 2012, an estimated 195 SMEs (with combined total revenues of €6bn and 10,000 employees) had been wholly or partly taken over by Chinese or Hong Kong investors. China managed to secure stakes in big companies as well. In July this year, Chinese State Grid invested heavily in the Italian power grid, buying 35% in CDP Reti. Safe in turn invested estimated 2 billions in ENI and ENEL, two state-controlled energy groups, while the state Administration of Foreign Exchange bought 2% stakes in FIAT Chrysler Automobiles, Telecom Italia and Prysmian, for a total of 670 million. In Greece, Chinese investors are focusing on shipping and tourism. In June, Greece and China signed shipbuilding deals worth $3.2bn that will be financed by the state-owned China Development Bank. The Chinese state shipping group Cosco Pacific had already acquired a concession to operate in the Piraeus port back in 2009, and iscompeting to buy the 67% stake currently held by the Greek State. Greece’s Transport ministry is also reportedly expecting China’s State Construction Engineering Corporation to participate in a tender to build and operate a new 800 million euro airport in Crete, which could offer the first direct connection between China and Greece. Chinese tourists are increasing in Greece, and (in 20 years time) they could possibly enjoy the huge luxury commercial centre that will be built on the coastal site of the former Athens airport. A long-term project worth 5 billion in which Chinese Fosun is participating together with Greece and Gulf state partners. In Portugal, Chinese investment is reported to account for 45% of the total privatization conducted in the context of the EU/IMF programme In Portugal, Chinese investment is reported to account for 45% of the total privatization conducted in the context of the EU/IMF programme. Chinese early investments were in power utility and infrastructure, with Three Gorges Corporation acquiring in 2011 a stake of 21% in Energias de Portugal and China State Grid acquiring 25% of REN, the national grid operator. In 2014, instead, investment was concentrated in financial services, with Fosun buying 80% of the Portuguese Caixa Seguros, the largest insurance company, and now bidding for BES assets. On top of these investments, Chinese buyers are potentially revitalising the otherwise paralysed real estate market in crisis-hit countries. The FT reports that government of Portugal, Cyprus, Greece, Hungary, Latvia and Spain are managing to attract Chinese real estate buyers by offering residency permits to non-Europeans who buy local property of a certain amount. The practice is known under the name of “golden visas”. In Portugal, the golden visa requires buying a property for at least 500,000 euros, the same in Spain (which is at present reported to have 500 application pending) whereas in Greece and Hungary it takes a 250,000 sale. Portugal is reportedly the country where the scheme has been more successful, with 1360 visa issued (81% of which to Chinese nationals) and an associated 900 million real estate investments (forecasted to reach 2 billion by end-2015).
Posted on: Thu, 16 Oct 2014 13:14:33 +0000
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