BERLIN (Reuters) – European investment in China is growing more concentrated with a handful of large firms particularly from Germany doubling down on their bets while virtually no new players seek to enter the market, according to a new report by research organization Rhodium Group.
The three big German automakers – Volkswagen, BMW and Daimler – as well as chemicals group BASF, accounted for a third of all European investment into China from 2018 to 2021, according to the report.
Germany as a whole, where former Chancellor Angela Merkel actively encouraged and aided companies to enter the Chinese market, accounted for 43% of foreign direct investment (FDI) over those four years, compared with 34% in the previous decade.
The report comes amid growing concerns about the ruling Communist Party’s tightening grip on Chinese society and the economy, which have contributed to the decision by Germany’s new government to reduce dependency on China.
Ironically, it is partly such signs of geopolitical tensions that are pushing some companies to increase investment in China in order to localize staff and supply chains and therefore ringfence business, according to the report.
“European investment has grown much more concentrated, both in terms of the companies that are investing there, the countries they come from, and the sectors in which they operate,” the authors wrote.
Germany, the Netherlands, Britain and France made up 87% of investment over the last four years compared with 69% in the previous decade, according to the report.
Five sectors – autos, food processing, pharma/biotech, chemicals and consumer products manufacturing – now make up nearly 70% of all FDI, compared with 57% in 2008-2012 and 65% in 2013-2017.
Meanwhile, stakeholders on the ground say that virtually no new European investors have made direct investments in the country since the outbreak of the pandemic, according to the report.
“This may be a temporary phenomenon, related to the pandemic and China’s zero-COVID response,” the authors wrote. “However, conversations with stakeholders suggest that a longer-term dynamic may be at work, with smaller European companies reluctant to accept the growing risks of investing in China.”
(Reporting by Sarah Marsh in Berlin; Editing by Matthew Lewis)
TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 103.40 points at 24,542.48.
In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.
The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.
The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.
The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.
This report by The Canadian Press was first published Oct. 16, 2024.
TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.
The S&P/TSX composite index was up 205.86 points at 24,508.12.
In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.
The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.
The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.
The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.
This report by The Canadian Press was first published Oct. 11, 2024.
TORONTO – Canada’s main stock index was little changed in late-morning trading as the financial sector fell, but energy and base metal stocks moved higher.
The S&P/TSX composite index was up 0.05 of a point at 24,224.95.
In New York, the Dow Jones industrial average was down 94.31 points at 42,417.69. The S&P 500 index was down 10.91 points at 5,781.13, while the Nasdaq composite was down 29.59 points at 18,262.03.
The Canadian dollar traded for 72.71 cents US compared with 73.05 cents US on Wednesday.
The November crude oil contract was up US$1.69 at US$74.93 per barrel and the November natural gas contract was up a penny at US$2.67 per mmBTU.
The December gold contract was up US$14.70 at US$2,640.70 an ounce and the December copper contract was up two cents at US$4.42 a pound.
This report by The Canadian Press was first published Oct. 10, 2024.
