Chinese Investors Are Heading To Europe
The world's most populous country, China, has its local investors vying for a slice of Europe's economic market.
As a recent Bloomberg article explained, Chinese investors "have a powerful attraction to companies in the European Union, and their targets are increasingly high-profile."
The latest in the series of China-Europe deals is potentially between bidder ChemChina's subsidiary China National Tire & Rubber Company and the world's fifth-largest tire maker, Pirelli.
If successful, the "7.1 billion-euro ($7.7 billion) deal will put the 143-year-old Italian company in Chinese hands," Reuters reported. Europe is considered attractive due to low prices, technology and blue-chip companies that reside there.
Around 1 percent of the European foreign direct investment stock is held onto by China, but that doesn't "include local booms in private Chinese investment, like those in Portuguese or Latvian real estate under those countries 'golden visa' programs," Bloomberg adds.
That represents a problem.
"For the moment, Chinese investment seems like money falling from the sky, but it could turn...into a Trojan horse introducing Chinese politics and values into the heart of Europe," Princeton's Sophie Meunier wrote last year.
Bloomberg, for one, is calling for Europe to establish a better policy to handle foreign direct investment.
The latest reports suggest Pirelli will not issue a special dividend when it merges with China National Tire.
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