China, UK and Italy: A bridge from London, the chinese way of investing in EU

Chinese direct investments in Europe are reaching a peak in terms of volume and definition of specific sector of development. The target market has been recognized as UK and the operative frame for investing operations are for sure real estate and infrastructure fields.

china_1876897aComparing with Beijing, London is still cheaper as long as one of most dynamic markets for those aspects may concern financial services, M&A operations and fiscal benefits for foreign investors inside EU area. China has defined the perfect place to create a network of big players involved on mutual business.

The Industrial and Commercial Bank of China for example  is going to invest more than 650 millions of pounds to create new business district near Manchester’s international airport: the project that inaugurates new direct flight from Manchester to China and viceversa, includes 500 thousands sqms of offices, shops and park.

The chinese way of making something concrete from theoretical base follows usually a pilot-scheme: if investment’s plan or structural reform or whatever put in pro-active agenda for chinese operators  will have be done with successful results according with preliminary expectations, for sure there will follow more operations on the same way, going to create a perfect standard of action.

The dynamism we are seeing around UK represents an intense pilot-action for direct investments towards a country and for those particular fields that are functional for chinese strategy:  they are boosting concrete presence with well framed operators from key-sectors in Europe.

An important building constrution’s company like the  Advanced Business Park, is investing in London nearly 1 billion of pounds to build the new HQ of the chinese group in Royal Dock near the city airport: so the equation is pretty clear: they are chinese companies working for chinese groups on foreign markets.

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As happened for some korean jaybol in the recent past, UK represents the perfect scenario for chinese holding companies to launch a concrete bridge on relocating profits and savings towards manufactural and strategical business opportunities in continental Europe. As long as shares are  hold in UK, the chinese asset for trading can be for easy managed through network of operators in Europe (some sister companies); and cash pooling through London allows the holding to re-place the liquidity of the group to different branches or countries-

Italy is the second manufactural player of Europe after Germany, and it’s also one of most important area about twinning projects for R&D in Europe and ToT (transfer of technology) for China (ranked as third european country on transferring technology towards China).

Milano EXPO got crucial role in terms of building a  common interest from chinese investors about Italy (China Entrepreneur Club is only one of most recent example), and the connection between Shanghai EXPO and Milan EXPO is still part of institutional speech for the chinese class-action about commercial and development’s opportunities in our country.

It’s for sure important to say that something is changing in chinese perception about Italy recently: governative actions are going to made developments that are “welcoming foreign investments” and political reforms are looking much more at “european dimension” with its specific parameters of operation; even if China has been always an active player to sign bilateral agreements much more than regional agreements (so they’ve been always interested to consider case by case specific actions according with contingent situations of each country in Europe than mediate with EU as geopolitical and economical institution) recently they are moving from Import- dimension (as requested by Party in last Five Years Plan) to wide strategy for direct investments worldwide in strategical assets. That’s why London represents the gate for continental Europe.

750_dettaglio2_Chairman-ICBC-Jiang-Jianqing--1It’s news of few days ago the making operative of branch of ICBC – The Industrial and Commercial Bank of China in Rome, after Milan; they are going to be concrete support for financial and commercial operations in south of Europe for chinese clients and they’ve chosen for Italy as place to be to make that bridge from London longer towards strategical area in the centre of Mediterranean. (before Italy the ICBC already made operative more than 15 branches in Africa).

Even if there’s big part of political opinion in Italy that is figuring out this operation as chinese colonization of our productive and financial environment, I warmly suggest to these speakers to analyze what’s  happening on international scenario for those aspects concerning commercial agreements (TPP and TTIP), it’s a concrete, wider perspective where Italy as “no-Europe” will never exist anymore: such scene (it doesn’t matter if you like it or don’t) confirm the primary role of China and, in particular, of chinese market on influencing stability of any productive area in the world; chinese investments are supporting (if we can say it in this way) government debts and they have central role for their assets acquisition strategy in many important groups worldwide. I think it would be much more better for us trying to understand this strategy and facing with chinese investments with skillful awareness about the entity of these operations than shouting against new colonizers who will get for some reasons 30% of the world already in terms of assets control and market volumes in approximately 10 years. (in particular if TPP and TTIP will continue on getting delayed).