Foreign direct Chinese investment in Europe seems to be becoming an accessory after hitting a record $ 18 billion (RM64.3 billion) last year, with food and agriculture the star, said a report.
Highlights of an upcoming report by the law firm Baker & McKenzie showed that foreign direct investment in China (FDI) in Europe doubled last year, prompting the continent one of the leading global FDI destinations Giant Asia.
Chinese FDI in Europe hardly existed before 2004, and did not really take off until 2009.
New dominated sectors such as food and agriculture in the first place at US $ 4.1 billion and real estate in third place with US $ 3.0 billion. Energy investments, which dominated for several years, were in second place at $ 3.7 billion.
"While opportunities of crisis and low valuations still play a role, consistently high levels of investment in a growing number of sectors and countries in the assets that are no longer cheap suggests that Chinese FDI in Europe is a structural trend, just a cyclical phenomenon, "said baker & McKenzie.
While acquisitions continue to represent the majority of investment, the report found that Chinese companies are increasingly investing in new projects such as research and development, food processing facilities, production of machinery and real estate.
He noted that a larger number of smaller deals as shown in the structural nature of Chinese investment in Europe.
Britain was the top European destination for FDI in China last year at US $ 5.1 billion, followed by Italy at US $ 3.5 billion.
During the last decade, more than two thirds of Chinese FDI has gone to countries that have emerged relatively unscathed from the debt crisis in the eurozone, although there has been great interest in privatization opportunities in Portugal, Italy and Spain.
"Chinese investors are clearly taking the opportunities that might arise in markets go through difficult times, but also see great benefit in investing in the most stable countries, where there are strong economic ties with China through trade and existing tourism "said Zhang Danian, the chief representative of the Shanghai office of Baker & McKenzie.
"They are making a long-term bet on the European economy."
The report said the new reforms to the Chinese economy could stimulate more outbound investment.
He noted that the investment trend has continued in early 2015 with the acquisition of Club Med leisure brands for $ 4.3 billion and Louvre Hotels Group for $ 1.5 billion.
Wanda Group of China announced yesterday that it has agreed to buy Infront-the Swiss sports marketing group headed by the nephew of FIFA president Sepp Blatter and having some broadcasting rights for the World Cup € 1.05 billion (RM4. $ 2 million).
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