European Firms Snatched Up As Chinese Foreign Investment Goes Upmarket

In 2011, Europe replaced the United States as China's biggest overseas investment for the first time ever. European companies have caught the eye of a Chinese economy that is rapidly moving into more advanced sectors.

A wind park operated by Portugal's EDP, a now partially Chinese-owned power company (EDP/Adelino Oliveira)
A wind park operated by Portugal's EDP, a now partially Chinese-owned power company (EDP/Adelino Oliveira)
Gabriel Grésillon

PARIS - Chinese investments in Europe were the talk of the town during the E.U.-China summit held last week in Beijing. China's interest in Europe has recently been confirmed by an exhaustive study: in 2011, for the first time since Chinese companies have started taking an interest in firms overseas, Europe has become China's top investment destination.

Thanks to their strong financial resources, Chinese companies have acquired stakes in the London water supply system, in the production of electricity in Portugal, in Norwegian chemicals (Elkem), German machine-tools (Putzmeister), and Italian luxury yachts (Ferretti). Overall, Europe has managed to attract about $10 billion of Chinese investments, which represents 34% of China's foreign M & A's in 2011 -- before Asia (27%) and North America (21%).

This is one of the conclusions reached by the teams of A Capital Investment Fund. After identifying every Chinese investment abroad since the beginning of 2010, A Capital ranked them by region, type of company (public or private), activity, etc.

Dragon goes global

Looking back over the last decade, the quarterly Dragon Index that was recently launched by A Capital shows that even if China only started making a move toward European companies around 2007, the country's investments abroad now account for about 5.3% of its GDP, compared to 2.6% 10 years ago. Still a far cry from the average 27% of OECD countries –which gives reason to think that the trend is going to accelerate in the future. In 2011 however, the index declined –because of exchange rates, granted, but also because investors "are cautious about several failures that happened during the first wave of investments," says André Loesekrug-Pietri, the founder of A capital.

Something else has changed: natural resources now only account for half these investments, compared to 75% one year ago: Chinese companies are now also focusing on technologies and brands. The new objectives of China's current five-year plan (eco friendly cars, renewable energies ...) resonate with Europe's production system. Looking at China's new top sectors of activity, everything becomes clear: investments in chemicals, but also especially in industry, are what made Europe so attractive for China.

This strategy of internationalization has allowed private companies to finally break through. In 2010, they accounted for 17% of China's investment volume –this number went up to 28% in 2011. "Unlike large state enterprises, private companies seem less threatening, especially when they take minority shareholdings in the firm's capital," says André Loesekrug-Pietri.

With the notable exception of the coup carried out by the China Investment Corporation (CIC), a sovereign wealth fund: the CIC managed to take –without causing any outcry-- 30% of the GDF Suez subsidiary in charge of exploration and production. A minority holding, strategically interesting for both parties -- and strategically announced in the middle of August.

Read the original article in French

Photo - EDP/Adelino Oliveira

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Iran To Offer Master's And PhD In Morality Enforcement

For those aiming to serve the Islamic Republic of Iran as experts to train the public morality agents, there are now courses to obtain the "proper" training.

Properly dressed in the holy city of Qom.

Iran will create new "master's and doctorate" programs to train state morality agents checking on people's public conduct and attire, according to several Persian-language news sources.

Mehran Samadi, a senior official of the Headquarters to Enjoin Virtues and Proscribe Vices (Amr-e be ma'ruf va nahy az monkar) said "anyone who wants to enjoin virtues must have the knowledge," the London-based broadcaster Iran International reported, citing reports from Iran.

The morality patrols, in force since the 1979 revolution, tend to focus mostly on young people and women, particularly the public appearance for the latter. Loose headscarves will send women straight to a police station, often in humiliating conditions. Five years ago, the regime announced a new force of some 7,000 additional agents checking on women's hijabs and other standards of dress and behavior.

A woman in Tehran walks past a mural of an Iranian flag

The traffic police chief recently said women were not allowed to ride motorbikes

Rouzbeh Fouladi/ZUMA

New academic discipline

Last week, for example, Tehran police revealed that they had "disciplined" agents who had been filmed forcefully shoving a girl into a van. Such incidents may increase under the new, conservative president, Ibrahim Raisi.

Speaking about the new academic discipline, Samadi said morals go "much further than headscarves and modesty," and those earning graduate degrees would teach agents "what the priorities are."

Iran's Islamic regime, under the guidance of Shia jurists, continuously fine tunes notions of "proper" conduct — and calibrates its own, interventionist authority. More recently the traffic police chief said women were not allowed to ride motorbikes, and "would be stopped," Prague-based Radio Farda reported.

Days before, a cleric in the holy city of Qom in central Iran insisted that people must be vaccinated by a medic of the same sex "as often as possible," and if not, there should be no pictures of mixed-sex vaccinations.

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