While China's state financial operators appear hesitant to set foot in murky European waters, its business leaders are braving ahead.
Xiang Wenbo, president of Sany Heavy Industry. [Photo: China.org.cn / He Shan]
Xiang Wenbo, president of the country's leading machinery manufacturer Sany Heavy Industry, said it is now a relatively golden time to invest in the financially troubled Europe.
"As [the global] financial crisis passes its fifth year, the economy has actually turned around in the U.S. and Europe," Xiang told reporters at a news conference held on the sidelines of the annual session of the National People's Congress. "Relatively speaking, it is a good time to invest in Europe now."
Practicing what its president preaches, Sany in January purchased German pump maker Putzmeister in a deal worth 360 million euro (US$480 million) to broaden the Changsha-based company's presence in Europe.
The deal is just one of a flurry of fresh investments flooding into the debt-stricken continent, which seems to reveal a trending mindset for Chinese investors echoing Xiang's remarks.
Chinese companies are ramping up efforts to scout for European assets. Earlier this year, China's investment in Europe included the Shandong Heavy Industry Group's purchase of a 75 percent stake in the Italian luxury yacht maker Ferretti. Meanwhile, the State Grid Corporation of China bought up 25 percent of Portugal's electric grid operator, Redes Energéticas Nacionais.
In the midst of the ongoing euro zone debt crisis, Chinese companies – drawn by advanced technology and increasingly competitive costs – are identifying opportunities to gain a foothold in Europe and betting on a turnaround in the region.
Wu Xilin, counselor to the Chinese Embassy in France, said that China's companies should consider two points before expanding overseas: The product should fit well into the Chinese market, and their European partners have technologies China needs.
In Sany's deal with Putzmeister, Xiang said the German pump maker can bring his company "the world's most advanced technology to sharpen our competitive edges." He added that Putzmeister will provide Sany with a strong international distribution and service network.
"If we only rely on ourselves, it will take five to 10 years to establish such a network," he said.
Not to be topped by Chinese companies, businesses in the U.S. have also joined in fray. A New York Times report said General Electric is forging ahead with a 30 million euro investment to expand research and development in energy, aviation and medical technology in Germany, and an additional 56 million euro to broaden its commercial presence. According to the same report, Infosys, an Indian technology consulting and outsourcing company, has planned millions in additional investments in its core northern European markets, and is preparing to hire hundreds more staff in Europe this year. Behind this buying spree is the increasing economic force of Chinese companies that is backing the country's growing interest in overseas markets.
After gaining continued success in China as a result of a building boom, Sany began to set its eyes on a bigger playing field. Riding on its growing momentum, the company, which had already gotten listed on the Shanghai market, began trading on the Hong Kong Stock Exchange last year.
Liang Wengen, founder and chairman of Sany and also China's most wealthy individual according to Hurun, first began nurturing his overseas aspirations in 2005 when he and Xiang decided to expand into Europe.
Sany's deal with the family-run pumper maker was the culmination of those years of efforts. The announcement of the company's first overseas acquisition caused a stir in Germany. Hundreds of workers held a protest in front of Putzmeister's headquarters after hearing the news for fear of possible layoffs. "The company is a new player in the global playing field, so it needs to learn more to attune itself to the local conditions," said Wu.