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China-EU investment boom to continue, officials say

By Ye Zhen | October 10, 2013, Thursday | Online Edition

Bilateral investment flows between China and Europe are expected to continue strong growth momentum despite global economic slowdown and the newly-established free trade zone in Shanghai will play an active role in promoting investment liberalization for the two economic blocs, officials and economists said today.

"China-Europe economic cooperation is increasingly diversified as Europe, which is already China's largest trade partner, is becoming an important destination for Chinese enterprises seeking overseas expansion," Zhai Jun, Vice Minister of Foreign Affairs, told a forum on China Europe Win-Win Partnership in Shanghai. "Meanwhile, European companies investing in China have achieved generous returns against the backdrop of international financial crisis and debt crisis", Zhai said.

Chinese enterprises invested US$10 billion in European countries in 2011, up from less than US$1 billion per year before 2008, with their footprints expanding from traditional sectors to more high-end fields such as communication equipment and renewable energy sources.

John Ross, senior fellow at Chongyang Institute for Financial Studies of Renmin University of China, said growth of exports from China to Europe will grow at a moderate rate in the next few years due to the weak economic situation in the region, but there are favorable opportunities for investments as political and investing climate between the two economies will continue to be good.

Qi Mei, counselor at Department of European Affairs of Ministry of Foreign Affairs, forecasts that Chinese investment in Europe will amount to US$250 billon to US$500billion by 2020.

On the other hand, European investment in China is also gathering pace, with nearly half of the European businesses in China making profits and 86 percent of European companies planning to ramp up their investments in China to consolidate their foothold, said Qi, citing data from the European Union Chamber of Commerce in China.

Meanwhile, attendants are placing high hope on the pilot free trade zone in Shanghai, expecting the zone to function as a new platform for deepening economic and trade ties between China and Europe with simplified administrative procedures, wider access for investments, and liberalized finance and trade policies in the zone.

"The establishment of the zone is a remarkable move to further reform and open China's economy and we welcome European firms to take this opportunity to grab a share of its development," said Zhou Bo, vice mayor of Shanghai.

Economy


 

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