How Chinese investors took advantage of the Euro zone crisis
Ten years ago, Chinese investments overseas added up to just USD 3 billion and last year, the number shot to USD 59 billion. Companies in oil, gas, metals and mining comprised over 50% of the investment portfolio for Chinese firms, which are now moving up the value chain with industry and technology. Shandong Heavy Industry Group Co. Ltd made a major purchase of European yacht maker Ferretti Group for USD 234 million is the latest in a string of buy outs.
This new trend is raising eyebrows in the west, all this a reminder of Japan’s global shopping spree in the late 1980’s. For now the US has taken a backseat to China’s overseas foray, since their investments in total fell from USD 3billion in 2001 to USD 1.3billion in 2011 citing a backlash not worth the effort – especially in an election year.
The downside of this sort of globalization? Possible protectionist measures, but for many cash strapped companies around the word, running on paranoia is inadmissible with China’s spending spree may yet be their salvation.