Headline, August 05 2020/ ''' '' EUROPE'S INVESTORS CHINESE '' '''


 CHINESE '' '''

WHEN A COMPANY CONTROLLED by the Chinese government bought a stake just recently in Norwegian Air, it was just the kind of acquisition that European political leaders were worried about.

Officials in Brussels and in numerous European capitals have been hurriedly erecting legal obstacles to such deals.

Their fear that Chinese investors backed by Beijing will exploit the pandemic to snap up financially distressed European companies at bargain prices.

Recently, the European Commission, the European Union's executive branch based in Brussels, announced proposals intended to prevent foreign investors from using government subsidies to outbid competitors for European assets.

The proposal is clearly aimed at China, which often provides financial support to key industries.

Unlike the United States, which screens foreign investments for security threats, Europe has few tools to scrutinize deals.

The proposals are ''like security at the door,'' Margrette Vestager, the European competition commissioner, said at a news conference in Brussels. ''They are about checking for trouble before it happens.''

The action comes as countries including Austria, the Czech Republic, Germany and Poland are in the process of giving themselves more power in examining acquisitions and block investments seen as a threat to national interests.

Aside from a few isolated cases like the acquisition of a stake in Norwegian Air, a low-cost carrier that was on the brink of bankruptcy because of travel restrictions, there isn't much evidence that Chinese companies are on a buying spree in Europe.

[Norway, where the airline is based, is not a member of the European Union, but has a trade agreement with the bloc and observes most of the same rules.]

On the contrary, Chinese investment in Europe has been declining steeply.

Chinese investors spent about 12 billion euros, or about $13.5 billion, in Europe last year, only a third of what they spent in 2016, according to research by Rhodium Group and the Mercator Institute for China Studies in Berlin.

But political leaders aren't just fighting a paper dragon, analysts say, Chinese investors, often backed by the government, still covet European companies as a source of technological expertise, access to international markets and political leverage.

Chinese investors have become more selective, in part because China's economic slowdown means they have less money and in part because Beijing has clamped down on sometimes reckless adventures abroad by Chinese companies.

The worry in Europe is ''not the volume of investment,'' said Agatha Kratz, a specialist in Europe  Europe-China relations at Rhodium Group, a research organization. ''The worry is about one or two or three acquisitions that could affect European competitiveness.''

Instead of big deals that generate a backlash, like the takeover of the German robotics maker KUKA in 2016, Chinese companies have focused on smaller deals that give them access to key technology.

An example is the acquisition last year by Alibaba, the Chinese e-commerce giant, of Data Artisans, a Berlin firm that specializes in managing large quantities of data.

The Chinese are not the only investors that European leaders have worried about. On one recent Monday, the German government said it would take a 23 percent stake in CureVac, a German company that is working on a coronavirus vaccine.

Berlin's involvement was seen as a way of fending off the Trump administration, which was reportedly interested in the firm's technology.

The Honor and serving of the Latest Global Operational Research and Thinking on Barriers and  Progress, continues. The World Students Society thanks author Jack Ewing and Stevis-Gridneff.

With respectful dedication to the Students, Professors and Teachers of the world.

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