How China Is Buying Its Way into Europe

Outside of Europe, China has also been lending huge amounts to developing countries with corrupt and incompetent governments. When those borrowers inevitably default years from now, China will have a lot of leverage including the ability to buy their votes in the UN in exchange for debt forgiveness. I suspect it's a long-term play to generate some international legitimacy around their ambitions to seize more territory.

Almost all mines and oil fields in Kazakhstan are developed by foreign companies (AFAIK mostly western ones). And it's not like they bring us western values, they are known to exploit local workers, to put their people in high positions instead of locals, to bribe corrupted officials, etc. It's simple: they have power, they could invade our country and we can do nothing about it. So we let them to drain our national wealth for a temporary truce. I don't see why this is any different with China and Europe. US or Russia is a respectable force for China, but Europe - not so much, so China will monetize its power and it'll buy your factories and ports if it can push it (and China has a lot of power to push).

> It's somewhat ironic that free trade was apparently okay when Germans and Austrians were buying up Eastern European banks, or when the Spanish were buying up mines, or the Americans buying steel plants, but is suddenly worrisome when the Chinese want to renovate railways.

China doesn't believe in free trade. They never have. The trade that exists today between the EU and China, or the US and China, is very far away from being free trade.

The looming scale is probably the biggest concern. It appears China's economy is going to continue getting a lot larger, doubling in size in perhaps just the next 12 years to ~$26 trillion. It'll be far larger than the EU economy at that point. If China's activity in Europe is already at this scale with a $13.x trillion economy, what will it look like in another decade or so?

Being under the economic foot of a Communist dictatorship that is very aggressively rolling back human rights, and Germany or Austria buying some Eastern European banks, are two dramatically different things. Germany and Austria are fairly liberal, democratic nations, with solid respect for human rights.

> it seems outlandish that those states would try to leverage their foreign ownership in shows of might that go way beyond that.

Really? Who exactly do you think is funding wahabi mosques worldwide??

Well, you seem to forget that China is a communist country currently lead by someone sworn for life. See how the political landscape changed for Hong Kong to understand what kind of influence it may have in Europe.

> What exactly is so different about China?

The companies are fully or partially state owned, so the political pressure may be greater. https://qz.com/1000541/norway-wants-china-to-forget-about-th...

You do not want to give too much power to a single actor. Doesn't matter if this is China, USA, EU.

I'm not sure "handle" necessarily means "prevent" or "halt".

It seems reasonable, upon observing a growing trend in Chinese ownership of one's domestic economy, to want to formulate a plan to monitor and understand that trend, and to be ready to regulate or mitigate it if it proves to be pernicious to to have unwanted consequences.

And, while I cannot say that I know what is in the minds of those officials in Europe, i suppose the main difference (as compared to US or middle eastern companies) might be the suddenness/newness of the trend and the rate at which they are buying up the economy.

Of course, this could be the "Summer of the Shark", as discussed in an HN thread last week.

It's not a bad thing or a good thing. But it's a possible avenue of influence and pressure from outside of the EU's own internal democratic process.

It's fair to scrutinize the investments and how the investors behave. This is not unexpected or unreasonable, since China itself also generally insists that outside countries stay out of China's internal decision making processes and domestic governance.

It's well known that China's companies are controlled to a relatively great extent by its government. And the priorities, values and goals of the ruling party of China differ from those of the EU.

When local EU priorities, values and goals come into conflict with those of China's government and, by extension, China's investment companies, it's reasonable for the EU to be concerned about pressure and influence from the government of China.

Here's an example:

"China has long won diplomatic allies in the world’s poor countries by helping them build expensive roads and ports. Now, it appears to have similarly won over a needy country in Europe.

At a meeting of the United Nations Human Rights Council this month in Geneva, the European Union sought to draw renewed attention to human rights abuses in China — only to be blocked by one of its member countries, Greece. A spokesman for the Greek Foreign Ministry in Athens called it “unproductive criticism.”"

https://www.nytimes.com/2017/06/19/world/europe/china-human-...

> Few complain about middle eastern or american companies buying up europe. What exactly is so different about China?

I would suspect it's because a lot of China's foreign buying spree involves state owned/controlled companies. If the US used the Federal Open Market Committee to purchase big chunks of foreign assets, especially in "critical" infrastructure, other countries might start to get a little worried.

Though, honestly, we brought it on ourselves -- China has ~4 trillion in foreign reserves which we happily gave to them in exchange for cheap consumer gadgets (totally ignoring why the government has these funds instead of the producers of said gadgets) which we've always known they would someday want to cash in on some real goods. Well, it turns out they like to buy "critical infrastructure" so woe is us.

I think in this case, where you stand depends on where you sit. There will be winners and losers. It's hard to determine good or bad at a philosophical or global level, but I can see why locals could be concerned. Decisions, once under local control, will now be made in the interests of someone far away, with different culture and motives. Profits are less likely to be reinvested locally.

In some ways, this kind of thing improves international relations. You're less likely to fight with a country you own a lot of businesses in, but make the decision just because China has a lot of money seems short sighted. It seems likely the cash will be short lived compared to the transfer of industry and property.

The very concept of a common strategy is something that China will likely win on, since they have more centralized decision making.

> Few complain about middle eastern or american companies buying up europe. What exactly is so different about China?

pretty simple: They aren't part of the free-market democracy petrodollar regime..

>> Ideally, it would flow back into that original country as investment.

That's what taxes are for.

You can't make a similar article because foreign investments are tighly controlled except for cases where business processes or IP can be studied and eventually expropriated.

No investment fund in the west would be able to just walk into China and start buying up real estate, infrastructure, and large private enterprises.

Foreigners cannot buy real estate in china.

Why is China overflowing with investment money? Where does it all come from?

There is a difference between state investments and private investments...or better said between private investors and a communist state "investor"