Chinese investors continue to rapidly buy up assets in Europe and the United States. According to the firm Baker & McKenzie, the year 2015 was a record number of Chinese investments in Europe: they grew by 27% and volume reached $ 23 billion. The greatest investment the Chinese made in Italy ($7.8 billion), France (3,5 milliard), United Kingdom (3.3 billion), the Netherlands (2.4 billion) and Germany (1.3 billion). Chinese investments in the European market went mainly into transport and infrastructure ($7.8 billion), real estate and hotels (6.4 billion), as well as in communication technology and Informatics (2,4 milliard). In General, the volume of Chinese investment in annual terms, Europe is already ahead of US. Overall, since 2000 the Chinese have invested $ 108 billion in the US and 97 billion in Europe.
France became the second European country after Italy, the level of Chinese investment. One of the most notable deals last year was the acquisition of the Toulouse-Blagnac airport to Chinese consortium Symbiose. China also wins the tourism and hotel market of Shanghai Fosun investment Fund global has acquired the French tour operator Club Med nearly one billion euros, the company Jing Jian International — hotel chain Louvre Hotels (the transaction amount of about 1.2 billion euros), and then bought an 11.7% stake in the Accor group Hotels. In Italy, the company ChemChina has become the largest tire manufacturer Pirelli.
It is noteworthy that 65% of the investments on European markets made by Chinese state-owned companies, while in the US the most active private investors from China. If in Europe, the Chinese put emphasis on the assets in the hotel sector and transport, in USA — in the services sector and entertainment.
The Chinese do not skimp on the purchase of the most expensive real estate, such as the Waldorf Astoria in new York and Marriot Champs-Elysee in Paris. In Europe and the U.S. they are attracted by the reliability investments, attractive yields and the opportunity to obtain a residence permit in the EU for wealthy Chinese.
In Europe, the interest of Chinese investors is gradually shifting towards the Mediterranean — commercial and residential real estate in the South of France, Spain, Italy, Cyprus and Greece. It is curious that the Chinese middle class began to actively buy real estate in Latvia. Here the main role played by interest in the Schengen visa. The Chinese do not know much about Latvia, but they are attracted by low prices and proximity to Germany. We should not forget Russia: in Saint Petersburg investima from Shanghai builds housing and commercial complex “Baltic pearl”, designed for 35 thousand people.
What lies behind the investment activity of the Chinese?
Analysts pay attention to the sharp intensification of the process of buying up assets in Europe and the United States: 80% of Chinese investments in these two directions were made in the last four years. What really lies behind the “investment fever” of Chinese? Economists believe that Chinese companies have accumulated a lot of cash, and they desperately need to invest in order to diversify its portfolio. This is especially true that the Chinese market has a tendency to slower growth. There is an ideological aspect: the Chinese government wants to strengthen the country’s image abroad. If before the Chinese were buying in the world markets, primarily raw materials and energy, but now their interest has shifted to the more prestigious assets — insurance and technology companies, infrastructure, hotels and cinemas. While in need of money the West throws political prejudices. If 10 years ago the U.S. Congress blocked the sale of Unocal oil consortium of Chinese Sinopec, today objections to such transactions are virtually no.
European analysts believe that the purchase of foreign assets is carried out under the leadership and guiding role of the Communist party of China. It is highly likely the hypothesis that in anticipation of the global financial crisis China is trying to move their huge foreign exchange reserves in real estate and gold. Starting in 2010, gold imports into China (via Hong Kong) soared 700% — from 120 tons to nearly a thousand tons per year. Real data on gold reserves of the Chinese state and individuals are kept secret. According to Western sources, China is buying up to 40% of the gold supplied to the world markets. Bloomberg Intelligence estimates gold reserves of China in 2015 3500 tons, although Beijing officially put the figure at 1,700 tons.
“Patriotic capitalism” in action
The Chinese authorities encourage “Patriotic capitalism”. Among its most prominent representatives — Chinese billionaire Wang Jianlin (Wang Jianlin), CEO of Dalian Wanda Group (the value of assets — about $ 100 billion). He is actively building a global shopping and entertainment Empire that includes real estate, commercial centers and cinemas. A few years ago, Wang Jianlin bought US cinema chain AMC Theatres for $ 2.6 billion, and in March of this year — a network of Carmike ($1.1 billion), making Dalian Wanda Cinemas, the largest cinema chain in the world. His last purchase in USA — film Studio Legendary Entertainment for us $ 3.5 billion. Don’t forget Wang Jianlin and old Europe: the project “Grand Paris” (shopping centers, cinemas, hotels, theme parks and cinemas) is estimated at three billion euros.
The sport is also becoming an important destination for investors from China. In 2015, Wanda Group bought a 20% stake in Spanish club Atletico Madrid, the Swiss sports-marketing company Infront Sports & Media for $ 1.2 billion, and this year became one of the main sponsors of FIFA. They say that van Scanline supports in this case the President of China, XI Jingping, who is a big football fan.
Another mastodon of Chinese big business — global insurance company Anbang. In March of this year, it bought the American investment group Blackstone resort-hotel chain, Strategic Hotels & Resorts. In addition, Anbang acquired for $ 1.6 billion of American insurance companies Fidelity & Caranty US Life and Annuities. The consortium is headed by a giant Anbang virtually unknown to the General public From a billionaire Sakai (Wu Xiaohui) — one of the most close to the leadership of the CCP “red capitalists”. He is married to the granddaughter of Deng Xiaoping and connected by blood with the other members of the Chinese leadership. According to Chinese media, “Sakai business fighting on the front with a sense of true patriotism”.
International rating agencies look with some skepticism on the scale of Chinese overseas projects and a fear for breakdown of funding. Themselves, however, Chinese investors are demonstrating confidence, because I feel for a support of the Chinese government and the Communist party.
