Chinese firms can realize win-win with Europe

COPENHAGEN -- Chinese private companies are rapidly emerging in Europe and investment cooperation between the two sides can lead to commercial wins for both parties, said Peter Fung, global chairman of KPMG Global China Practice.

"We have seen that many Chinese companies have invested abroad, not only in developing countries but also in developed countries especially after the global financial crisis. This trend is going to continue," said Fung in a recent interview with Xinhua in Copenhagen.

"Looking for 2013, we expect increasing numbers of Chinese private owned companies to seek investment opportunities in Europe, " he said.

In total, there were 329 Chinese enterprises'overseas mergers and acquisitions deals in 2012. The total value of the 253 announced transactions reached around 66.5 billion U.S. dollar, an increase of 244 percent compared to the previous year, according to an analysis by KPMG, one of the world's top four international accounting firms.

"The global financial crisis makes many European companies to seek potential investments and partners. Chinese companies are in good positions from the financial perspectives. They are in matching positions," Fung explained.

For example, Sany Heavy Industry, a leading Chinese private owned manufacturer of construction machinery took over the German engineering firm Putzmeister in 2012.

Fung said Europe has a large consumer market for sales of goods and service as well as advanced technologies, an educated workforce and desirable brands. By acquiring the European companies, the Chinese private owned companies can improve the competitiveness both domestically and internationally.

He spoke highly of the Chinese government's determination to shift its economic growth from an export-oriented model to one that is more sustainable, noting that such a growth model will provide fresh opportunities for Sino-Danish business partnership.

"China has achieved the economy success significantly and become the second largest economy in the world. The Chinese government is working towards to a sustainable growth. Though Denmark is a small country, it is very advanced in innovation and design, sustainable and environment solutions. There are good opportunities and potentials for Danish and Chinese companies to work together," he argued.

Investing in such knowledge-intensive sectors would likely mean developing technologies on site in Denmark and then tapping the wider European market, and are likely to offer most pay-off for Chinese and Danish partners.

So far, companies including telecoms giant Huawei, electric vehicle maker BYD and genome sequencing laboratory BGI have invested in Denmark. Denmark's Nordic neighbor Sweden also hosts some 140 Chinese-owned companies.

Moreover, Sweden and Denmark are in favor of attracting Chinese companies as these companies "have behaved very responsible" in Nordic counties, according to Ole Hedemann, head of KPMG China Practice in Denmark.

He pointed out that the acquisition of the Swedish Volvo by Chinese Geely is a good example.

"We have also observed that some of the foreign investors came to the Nordic countries to get the technologies. They bought the companies, then transferred the intellectual properties out of the Nordic counties, then closed the companies down,"said Hedemann.

"On the contrary, Geely is actually developing the Swedish market. It is s good signal that Chinese companies do not just come to take the expertise but partner with the Nordic companies. That is a good way of investing in other countries," he added.