Experts Warn About Chinese Investment in Europe

August 21, 2012 4:55 pm Last Updated: October 1, 2015 12:34 pm
China's investment in Europe
A businessman walks past a poster advertising the renminbi currency (Chinese yuan) in Hong Kong on Aug. 18, 2011. China's investment in Europe during the European Union debt crisis has been closely watched. (Laurent Fievet/AFP/Getty Images)

The Chinese regime has boosted investment in Europe during the European Union debt crisis, but much as the troubled region needs the money, and there are reasons for caution, according to two experts. Professors of economics and business described what they said are hidden agendas that have little to do with business.

Professor Xie Tian of the University of South Carolina Aiken Business School told NTD Television, a New York-based, primarily Chinese broadcaster, that he thinks the investment is meant to mute human rights concerns, and to help the Chinese Communist Party (CCP) get military technology and weapons from the continent.

“The CCP is under pressure from the international community for its human rights issues. Governments in Western Europe denounce CCP’s human rights violations. The CCP diverts the pressure through economic investment,” he said. “So the CCP certainly has other hidden motives beyond making money.”

He added that he believes the Communist Party hopes investing will help it to obtain military technology from Europe, and lead to fewer restrictions on exporting arms from Europe to China.

“However, the West actually knows this, so it won’t sell its real high-tech arms to the CCP,” according to Xie Tian.

Xia Yeliang, a professor at the School of Economics of Peking University, said in an interview also with NTD that in recent decades, the Chinese regime’s foreign investments have brought little return in revenue. He said he thinks the investments are not always meant to build profits.

Xia referred to the financial losses and bankruptcies of state-backed Chinese firms, including some engaged in overseas investments. “It’s hard to say that these kinds of Chinese investments are entirely for economic purposes. In many cases, these investments have a strong political purpose,” he says.

They are aimed both to “strengthen China’s influence” in Europe, and “produce a psychological impact” in line with broader public diplomacy goals.

When investment flows from Europe to China, problems have ensued, according to French magazine Liberation. It quoted a French businessman in China who decided to withdraw his company from China over corruption and lack of security.

And even with a massive infusion of funds, Xie does not think the influence will be outsize. “The CCP is not yet at the point of truly influencing or manipulating the European economy. As far as China is concerned, this is a large portion of China’s total foreign investment. But in fact, its total amount is very, very small. The scale is also far less than the capital investment of Japan or South Korea in Europe.”

[email protected]

The Epoch Times publishes in 35 countries and in 19 languages. Subscribe to our e-newsletter.