IDEAS home Printed from https://ideas.repec.org/a/kap/asiaeu/v12y2014i1p159-177.html

China’s direct investment in the European Union: a new regulatory challenge?

Author

Listed:
  • Haiyan Zhang

  • Daniel Bulcke

Abstract

While China is fast becoming an important outward direct investor, its companies are showing an increasing interest to locate in Europe and the European Union (EU). It has been suggested that this can partly be explained by the more lenient attitude of the European countries compared to the US, where some acquisitions were abandoned when they ran into political opposition based on security concerns. Yet, also in Europe, the media follow rather closely each new Chinese entry, and certain politicians have started to criticise the take-over of technology-oriented companies, especially by Chinese state-owned firms. Against the background of a very open foreign direct investment (FDI) policy as measured by OECD FDI Restrictiveness Index for the EU and the individual countries, an overview is given of the pre- and post-establishment obstacles to direct foreign investment. Also, the EU policy measures that directly or indirectly deal with incoming direct investment are discussed. Within the context of the EU competition policy and the merger regulation, the EU Commission has cleared five cases of take-over by Chinese state-owned enterprises. Although the Lisbon Treaty authorises the EU Commission to take charge of investment policy as part of the EU commercial policy, it will take time to realise this. If the announced negotiations about an investment treaty between China and the EU could work out the necessary balance, it would be an important step in achieving more reciprocity between their respective investment regimes. Copyright Springer-Verlag Berlin Heidelberg 2014

Suggested Citation

  • Haiyan Zhang & Daniel Bulcke, 2014. "China’s direct investment in the European Union: a new regulatory challenge?," Asia Europe Journal, Springer, vol. 12(1), pages 159-177, March.
    • Handle: RePEc:kap:asiaeu:v:12:y:2014:i:1:p:159-177
    DOI: 10.1007/s10308-014-0383-9
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s10308-014-0383-9
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s10308-014-0383-9?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Filip Beule & Daniel Bulcke & Haiyan Zhang, 2011. "Chinese Outward Direct Investment in Europe and Belgium: Characteristics and Policy Issues," Palgrave Macmillan Books, in: Louis Brennan (ed.), The Emergence of Southern Multinationals, chapter 11, pages 195-225, Palgrave Macmillan.
    2. Angela Huyue Zhang, 2012. "The Single-Entity Theory: An Antitrust Time Bomb For Chinese State-Owned Enterprises?," Journal of Competition Law and Economics, Oxford University Press, vol. 8(4), pages 805-830.
    3. Theodore H. Moran, 2009. "Three Threats: An Analytical Framework for the CFIUS Process," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 4297, July.
    4. Filip Beule & Daniël Bulcke, 2010. "Changing Policy Regimes in Outward Foreign Direct Investment: From Control to Promotion," Palgrave Macmillan Books, in: Karl P. Sauvant & Geraldine McAllister & Wolfgang A. Maschek (ed.), Foreign Direct Investments from Emerging Markets, chapter 0, pages 277-304, Palgrave Macmillan.
    5. Takeshi Koyama & Stephen S. Golub, 2006. "OECD's FDI Regulatory Restrictiveness Index: Revision and Extension to more Economies," OECD Working Papers on International Investment 2006/4, OECD Publishing.
    6. Kiran Desai & Manu Mohan, 2011. "Fear of the Chinese or Business as Usual at the European Commission? EU Merger Regulation and the Assessment of Transactions Involving Chinese State-owned Enterprises," Antitrust Chronicle, Competition Policy International, vol. 8.
    7. Filippov, Sergey, 2012. "European investment promotion agencies vis-à-vis multinational companies from emerging economies: Comparative analysis of BRIC investor targeting," MERIT Working Papers 2012-076, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Nana de Graaff & Diliara Valeeva, 2021. "Emerging Sino–European Corporate Elite Networks," Development and Change, International Institute of Social Studies, vol. 52(5), pages 1147-1173, September.
    2. Bas Hooijmaaijers, 2021. "A comparative analysis of the role of the state in Chinese, Japanese, and Korean investment in the EU," Asia Europe Journal, Springer, vol. 19(4), pages 427-444, December.
    3. Wade Jacoby, 2014. "Different cases, different faces: Chinese investment in Central and Eastern Europe," Asia Europe Journal, Springer, vol. 12(1), pages 199-214, March.
    4. Sophie Meunier & Brian Burgoon & Wade Jacoby, 2014. "The politics of hosting Chinese investment in Europe—an introduction," Asia Europe Journal, Springer, vol. 12(1), pages 109-126, March.
    5. Marta Anna GÖTZ, 2015. "Pursuing FDI policy in the EU – Member States and their policy space," Journal of Economics and Political Economy, KSP Journals, vol. 2(2), pages 290-308, June.
    6. Sophie Meunier, 2014. "A Faustian bargain or just a good bargain? Chinese foreign direct investment and politics in Europe," Asia Europe Journal, Springer, vol. 12(1), pages 143-158, March.
    7. Mahdi Ghodsi, 2019. "How Do Technical Barriers to Trade Affect Foreign Direct Investment?," wiiw Working Papers 160, The Vienna Institute for International Economic Studies, wiiw.
    8. Wei Yin, 2021. "A comparison of the US and EU regulatory responses to China’s state capitalism: implication, issue and direction," Asia Europe Journal, Springer, vol. 19(1), pages 1-25, March.
    9. Vaccarini, Katiuscia & Lattemann, Christoph & Spigarelli, Francesca & Tavoletti, Ernesto, 2017. "Chinese FDI and psychic distance perceptions on regulations in the German renewable energy sector," Energy Policy, Elsevier, vol. 101(C), pages 723-732.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Filip Beule & Haiyan Zhang, 2022. "The impact of government policy on Chinese investment locations: An analysis of the Belt and Road policy announcement, host-country agreement, and sentiment," Journal of International Business Policy, Palgrave Macmillan, vol. 5(2), pages 194-217, June.
    2. Bickenbach, Frank & Liu, Wan-Hsin & Li, Guoxue, 2015. "The EU-China bilateral investment agreement in negotiation: Motivation, conflicts and perspectives," Kiel Policy Briefs 95, Kiel Institute for the World Economy.
    3. Karingi, Stephen N. & Leyaro, Vincent, 2010. "Surmounting Africa's Trade Capacity Contraints: An Assessment of the Effectiveness of the Aid for Trade," Conference papers 331966, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    4. Eric Rugraff, 2010. "Foreign Direct Investment (FDI) and Supplier-Oriented Upgrading in the Czech Motor Vehicle Industry," Regional Studies, Taylor & Francis Journals, vol. 44(5), pages 627-638.
    5. repec:spo:wpecon:info:hdl:2441/8310 is not listed on IDEAS
    6. Lewis Davis & Claudia R. Williamson, 2018. "Open Borders for Business? Causes and Consequences of the Regulation of Foreign Entry," Southern Economic Journal, John Wiley & Sons, vol. 85(2), pages 508-536, October.
    7. Fernando Mistura & Caroline Roulet, 2019. "The determinants of Foreign Direct Investment: Do statutory restrictions matter?," OECD Working Papers on International Investment 2019/01, OECD Publishing.
    8. Thomas Hutzschenreuter & Arie Y. Lewin & Stephan Dresel, 2011. "Time to Success in Offshoring Business Processes," Management International Review, Springer, vol. 51(1), pages 65-92, February.
    9. Carolina Lennon, 2008. "Trade in services: Cross-border trade vs commercial presence. Evidence of complementarity," Working Papers halshs-00586217, HAL.
    10. C. Fred Bergsten & Cathleen Cimino & Gary Clyde Hufbauer & J. Bradford Jensen & Sean Miner & Theodore H. Moran & Jeffrey J. Schott, . "Toward a US-China Investment Treaty," PIIE Briefings, Peterson Institute for International Economics, number PIIEB15-1, October.
    11. Sebastian Barnes & Romain Bouis & Philippe Briard & Sean Dougherty & Mehmet Eris, 2013. "The GDP Impact of Reform: A Simple Simulation Framework," OECD Economics Department Working Papers 834, OECD Publishing.
    12. Ogbeifun Lawrence & Shobande Olatunji Abdul, 2020. "Causality Analysis of Disaggregated FDI Inflows on Sectorial Growth in OECD Area," Studia Universitatis „Vasile Goldis” Arad – Economics Series, Sciendo, vol. 30(4), pages 92-110, December.
    13. Miroslav N. Jovanovic, 2011. "Globalisation: An Anatomy," Chapters, in: Miroslav N. Jovanović (ed.), International Handbook on the Economics of Integration, Volume I, chapter 11, Edward Elgar Publishing.
    14. A. E. Safarian, 2015. "Simplifying the Rule Book: a Proposal to Reform and Clarify Canada’s Policy on Inward Foreign Direct Investment," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 425, May.
    15. Shandre Mugan Thangavelu & Lili Yan Ing & Shujiro Urata, . "Services Productivity and Trade Openness: Case of ASEAN," Chapters, in: Lili Yan Ing (ed.), East Asian Integration (First Edition), chapter 7, pages 195-222, Economic Research Institute for ASEAN and East Asia (ERIA).
    16. Zongo, Amara, 2020. "The Impact of Restrictive Measures on Bilateral FDI in OECD Countries," MPRA Paper 101929, University Library of Munich, Germany.
    17. Fukui, Tani & Lakatos, Csilla, 2012. "A Global Database of Foreign Affiliate Sales," Conference papers 332203, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    18. Fiori, Giuseppe & Nicoletti, Giuseppe & Scarpetta, Stefano & Schiantarelli, Fabio, 2007. "Employment Outcomes and the Interaction Between Product and Labor Market Deregulation: Are They Substitutes or Complements?," IZA Discussion Papers 2770, IZA Network @ LISER.
    19. Amara Zongo, 2022. "The effects of restrictive measures on cross‐border investment: Evidence from OECD and emerging countries," The World Economy, Wiley Blackwell, vol. 45(8), pages 2428-2477, August.
    20. David Godsell & Ugur Lel & Darius Miller, 2023. "U.S. national security and de-globalization," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 54(8), pages 1471-1494, October.
    21. repec:prg:jnlpep:v:preprint:id:652:p:1-17 is not listed on IDEAS
    22. Gabor Hunya & Roman Stöllinger, 2009. "Foreign Direct Investment Flows between the EU and the BRICs," wiiw Research Reports 358, The Vienna Institute for International Economic Studies, wiiw.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:asiaeu:v:12:y:2014:i:1:p:159-177. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.