07-08/2016 Equal opportunities
In the end the announcement came as a surprise: the state-owned Chinese corporation ChemChina wants to take over the Swiss seed and agricultural chemicals company Syngenta for EUR 43 billion. ChemChina said that the move – the most expensive purchase abroad by a Chinese firm so far – is based on the desire to acquire the necessary agricultural knowledge to ensure the Chinese population’s food supply, amongst other things.
The western public eye’s focus on investors from the Far East was thus intensified with one fell swoop. Yesterday’s workbench of the world is becoming today’s international investor. China has the most formidable foreign exchange reserves in the world; and these funds need to be invested.
Recent moves in this segment include the acquisition of the medium-sized German concrete pump manufacturer Putzmeister by the Chinese construction machinery firm Sany Group in 2012; with the same firm exchanging 10% participatory stakes with the Austrian crane-maker Palfinger in 2014. Syngenta’s suitor ChemChina was also already active previously, having bought the Italian tyre producer Pirelli in 2015; as well as the German mechanical engineering group KraussMaffei this January. Now it has cast its eye on the Swiss seed and agricultural chemicals enterprise.
The Chinese have similar ambitions in Greece. At the end of January Cosco acquired 67% of the shares in the port of Piraeus for approximately USD 414 million. Then the country moved its sights from Southeastern to Western Europe. At the beginning of February the port of Antwerp signed a cooperation agreement with the Industrial and Commercial Bank of China. Further developments are probably not far behind, with Antwerp not likely to be the last port that China focuses on. From the Chinese point of view they are moving strongly towards completing the supply chain – producing the goods first and then transporting them to their own ports in Piraeus and Antwerp. So far, so good.
But China should focus on creating similar investment conditions at home as it meets in many a country abroad. To this day non-Chinese enterprises cannot take commercial stakes in the country’s firms at all, or only under certain conditions. A degree of opening up by China would represent an opportunity for both camps.
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