Spazio Lenovo’s concept store in Milan

Chinese companies’ enthusiasm for investing in Europe remains high, despite the coronavirus pandemic’s devastating impact on the global economy, according to industry insiders and analysts. A stable, secure environment in Europe and favorable political conditions are attractive for investors, the experts said. Gina Qiao, Senior Vice President and Chief Strategy and Marketing Officer at Lenovo Group, said the company has been investing in Europe to help drive sales and boost efficiency. “Two recent examples of this are the opening of Spazio Lenovo – our first European flagship store, which launched in Milan, Italy, in September – and our plan to open a new in-house manufacturing facility in Hungary in the spring to increase our production capacity and better serve our European customers,” she said. Lenovo is among the top three companies in terms of personal computer sales in nearly all European countries and the leading vendor in key markets such as Germany and Italy. Qiao said that as working, learning and spending more leisure time at home have become the global norm during the pandemic, the company has seen strong growth in demand for devices and games, along with rising cloud and infrastructure business.

Last year, Chinese investment in Europe rose rapidly, but fell significantly in Latin America, North America and Africa, according to the 2019 Statistical Bulletin of China’s Outward Foreign Direct Investment. The bulletin was recently issued by the Ministry of Commerce (MOFCOM), the National Bureau of Statistics (NBS) and the State Administration of Foreign Exchange (SAFE). China’s overseas direct investment (ODI) in Europe totaled USD10.52 billion last year, a rise of 59.6% year-on-year, with most of it going to the Netherlands, Sweden, Germany and the United Kingdom. By the end of last year, the country had set up more than 3,200 enterprises in the European Union, covering all the trading bloc’s member states and employing more than 260,000 foreign workers. He Yun, Assistant Professor at Hunan University’s School of Public Administration, said Europe offers a stable and legally secure environment for Chinese investment, compared with some developing countries, where there tend to be more risks. In contrast to the United States, relations between China and European countries are generally advantageous for Chinese investment. Moreover, since 2008, the euro exchange and interest rates against the yuan have been relatively low, favorably pricing European assets and reducing costs for Chinese investors. “There is still a lot of enthusiasm among Chinese companies for investing in Europe, but the continent needs to contain Covid-19 first to enable its economies and investment inflows to recover,” He said. She added that foreign investment, including that from China, could be crucial to Europe’s post-pandemic recovery. “The European Union should facilitate the swift conclusion of a bilateral investment agreement to make two-way investment between the EU and China easier,” she added.

Roland Brouwer, the Netherlands Foreign Investment Agency’s Executive Director for China, said that for many years China has been the Netherlands second-largest source of investment. “Most companies see the Netherlands as a springboard into the European market,” he said. Chinese companies are highly active in sectors such as information and communications technology, electronics, high-tech, chemicals, transportation and logistics, agrifood and creative industry. ODI from Chinese tech companies last year nearly doubled compared with five years ago, Brouwer said.

In 1998, BYD, a major Chinese manufacturer of new energy vehicles, established its European subsidiary in Rotterdam, the Netherlands, focusing on providing new energy products and services, including vehicles, rechargeable batteries and solar panels. Isbrand Ho, Managing Director of BYD Europe, said the company’s main development strategy in the European market, where great importance is attached to carbon emissions, has focused on promoting its electric buses. In 2017, BYD established its first electric bus and truck factory in Hungary, with an investment of more than €30 million. The following year, it set up its second factory in France, with an investment of €10 million. “To date, BYD has received orders for more than 1,400 pure electric buses, taking up about 20% of the European market,” Ho said. “Our pure electric bus footprint covers more than 100 cities in 20 countries, including Amsterdam, London, Brussels and Turin, and has provided them with green solutions.” He added that BYD Europe has more than 500 employees, with over 50% of them locals. The company also has a research and development center and a localized R&D team in the Netherlands. Despite the pandemic, BYD has tackled the difficulties and delivered products and services on time, including putting its pure electric buses on the roads in the UK, Spain and Germany. The company is also due to launch its pure electric trucks in the European market, including 7.5-metric-ton light trucks, 19-ton heavy trucks and tractors, and 2.6-ton vans.

Raymond Wang, Partner at global consultancy Roland Berger, said that attract more Chinese investment, the first thing European countries need to do is ensure the Covid-19 outbreak has been fully contained, the China Daily reports.