In Europe for Europe

Paul Taylor, CEO of Dynex Semiconductor Ltd, a British company bought by China's Zhuzhou CSR Times Electric and which is now a subsidiary, says it is very expensive to transfer workers from the parent company to work with his team in the UK.

"This is a problem because we sell our products in China through our parent company and we need people working in China who understand our products. By transferring them to work in the UK for maybe three years, they can gain a good understanding of our products," Taylor says.

"If we sell more products in China, our manufacturing in the UK will grow, and we can recruit more local people to work for us if we grow."

In 2008, Zhuzhou CSR Times Electric bought a 75 percent share in Dynex. It has since invested in Dynex to build a new research and development center costing 12 million pounds.

Taylor says most of the Chinese workers at Dynex are sent from Zhuzhou CSR Times Electric on one-year ICT visas, because the salary of 40,000 pounds needed to pay workers staying for more than a year is unaffordable.

Sylvain Godinet, vice-director of the HLB Swiss member firm Beau Group, sees differences in business culture as a big challenge, and in particular, "the difficulty of EU counterparts to understand the Chinese manners in business".

"Typically, Europeans consider signing a contract with their Chinese counterparts to be the most important act in a partnership. And typically in mergers and acquisition cases, Europeans focus only on the selling price. This is difficult for Chinese parties who generally want to develop more deeply the relationship, exchange know-how and strengthen the relationship and collaboration."

Such challenges are inevitable for Chinese investors in Europe, and they need to be fully prepared for them, the EU chamber says.

"As far as operational obstacles are concerned, Chinese companies should be prepared to adapt to the market. You can look back at what European companies did in the Chinese market 30 years ago. It requires a fundamental adjustment to existing corporate strategy," Cucino says. "On the other hand, I believe that the further opening-up globally, which happened in the past 30 years, should narrow the length of this period of time for adjustment for Chinese companies."

He suggests that the EU should provide a package of easily comprehensible information regarding how to do business in Europe and how to do business in specific EU member state countries.

The EU has been China's largest trading partner for more than 10 years. Last year, bilateral trade dropped 3.7 percent to $546.04 billion. Exports from China to the EU fell 6.2 percent to $333.99 billion, and imports grew 0.4 percent to $212.05 billion.

Trade frictions have also been developing between the two sides. Sectors such as ceramics, photovoltaic and telecommunications have all become battlefields.

Experts say that because of such issues a cloud hangs over trade.

That suggests Chinese companies' increasing desire to invest in the EU may become a second link between China and the EU in strengthening economic relations.

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