Chinese companies already invested in the European Union plan to increase their capital commitments to the region, according to a recent European Union Chamber of Commerce survey that polled 74 Chinese enterprises.
Of the respondents, 97 percent planned more EU investments and 87 percent expected those investments to be larger than the initial commitment.
Most of the surveyed companies (85 percent) are in Europe to sell their products. Although 78 percent reported encountering operational difficulties in the EU, such as high costs and bureaucracy, this was apparently not a hindrance.
Although private equity firms play a role in China’s increasing outbound trend, many have the most to offer by facilitating European business coming into China, said Henri-Pierre Vacher, partner at Roland Berger Strategy Consultants.
European private equity interest in China is picking up. In July, cross-border firm A Capital initiated a partnership between the Danish highend electronics maker Bang & Olufsen and China distributor Sparkle Roll, Private Equity International reported earlier. The partnership will assist Bang & Olufsen’s first significant push into Asia.
Also last year, two European companies, AXA Private Equity and Iris Capital, opened Beijing offices as part of a growing portfolio management trend, PEI reported. AXA aims to find synergies between its European portfolio and Chinese companies. Iris, a venture capital firm, hopes to “provide a bridge” to bring European technology to Asia.
With little to no growth in Europe, “the role for private equity is to help [European companies] capture growth in China”, Vacher said.