For Wieland Wagner, visiting 11 European countries in 14 days proved enlightening. Not because he had much to learn about Europe himself, but rather because of who he was travelling with. The journalist from German newspaper Der Spiegel had managed to persuade a Chinese tour group to let him shadow it on its travels in his native continent.
“Today, finally, our great journey through beautiful Europe begins,” 28 year-old Liu Hong tells Wagner as they depart Beijing. And over the following days the group visits Stuttgart (“the home of Daimler and Bosch”), concludes that “Italians are lazy” and is shocked to discover that their Belgian bus driver is required by law to take regular breaks.
But for Liu the most crushing moment is on the trip’s penultimate day in Paris. As a young girl she grew up admiring French elegance. But as she switches on her video camera on the Champs-Elysees she sees only street litter and poorly dressed people. “My dream has been destroyed,” she laments.
But it’s not all disappointment. To their great satisfaction, the group buys gold Rolex and Omega watches in Lucerne. Wagner, on the other hand, senses a distaste among some of his fellow Europeans for these new tourists. A German compatriot on their flight remarks disparagingly: “A Chinese group? I’d rather sit next to a bunch of kids!”
Over the past week a rather more senior Chinese group has been making a European tour, but many of the themes from Wagner’s article have resonated during their travels. Chinese premier-in-waiting Li Keqiang led his own group to Europe in an enthusiastic mood, and the Europeans have welcomed his money where it suited them. But a high-profile example of Europe’s apparent ambivalence towards Chinese investment has also led to disillusion in the Chinese media.
Li travelled to Spain, Germany and the UK. Early on in his trip he announced that China would buy Spanish government bonds. That was a key endorsement given the size of China’s forex reserves (as well as the stubborn rumours that Spain could be the biggest domino yet to fall in the Eurozone’s ongoing debt crisis). China had earlier purchased Portuguese government bonds, in a move to help Europe deal with a crisis of confidence in its bond markets and head off a deteriorating situation which some see as a threat to the survival of Europe’s single currency.
Bonds, great. But Europeans are far less ready to sell their trophy firms to the Chinese.
Last Thursday, a Tianjin-based company dropped its $1.3 billion offer for Holland’s cable wire maker, Draka Holding. The acquisition was announced in November, and on completion would have seen Xinmao S&T become the world’s top industrial cable maker.
However, European Union officials lobbied aggressively to thwart the deal, and eventually the Dutch firm was sold instead to Italy’s Prysmian for a lower price of $1 billion in cash and stock. The Wall Street Journal reported that the failed Xinmao transaction was a “sign that Chinese investment in Europe is taking on heightened political sensitivity”.
The EU’s trade commissioner, Antonio Tajani has said that he doesn’t support protectionism in any form but he evidently disapproved of this particular deal, telling French reporters: “We have to make sure it’s not a front for something else, in terms of taking our know-how abroad or national security.”
The Guangming Daily was quick to pounce on what it regarded as European double standards: “On the one hand they hope China can provide assistance in the financial crisis to pull the Eurozone out of the woods; on the other they refuse China.”
The indignant newspaper also quoted another EU official who had warned against China’s attempts to buy its companies. Its conclusion: why bother helping these perfidious people? China should not be “solving Europe’s problems”, it argued, advocating instead a more self-interested use for the cash than purchasing European debt. “The greatest responsibility for the government is to develop our own country so that by 2020 the Chinese people – accounting for a one fifth of the total world population – live a comfortable life.”
© ChinTell Ltd. All rights reserved.
Sponsored by HSBC.
The Week in China website and the weekly magazine publications are owned and maintained by ChinTell Limited, Hong Kong. Neither HSBC nor any member of the HSBC group of companies ("HSBC") endorses the contents and/or is involved in selecting, creating or editing the contents of the Week in China website or the Week in China magazine. The views expressed in these publications are solely the views of ChinTell Limited and do not necessarily reflect the views or investment ideas of HSBC. No responsibility will therefore be assumed by HSBC for the contents of these publications or for the errors or omissions therein.