“The last decade has seen China becoming the key emerging nation in the Asia-Pacific region and the most attractive market and location for European multinationalsan multinationals.”
Just 20 years ago, trade between China and European multinationals was sporadic and statistically insignificant. In the first half of 2009, the European multinationalsan Union (EU) was China's largest trading partner with a volume of US$224.69 billion, surpassing the United States. China is also the largest recipient of EU exports. Even though China's accelerated economic presence in European multinationals and emerging economies has been dubbed by some as opportunistic, the fact is that China has seen continued and explosive growth throughout most of the past decade — averaging a 10% gross domestic product expansion while the economies of European multinationals, the United States and most of the world were contracting. Global recession was on the horizon in 2007, and Chinese entrepreneurs saw an opportunity to invest in and outright acquire companies in multiple verticals around the world, many on the verge of bankruptcy at the time of acquisition. Participation in offshore infrastructure development contracts, major acquisitions of mineral and metal outfits and increased imports of Western goods are all a part of the complex economic landscape of a global, powerful China.
Trade protectionist measures in the United States have shifted China's attention quickly to European multinationals and several emerging economies such as Brazil and India, with some European multinationalsan markets openly courting Chinese investors in an effort to boost exports and increase investments. Chinese investors have acquired whole and majority stakes in companies based in Germany and Italy, among others. At the same time, according to Eurostat (the European multinationalsan Statistical Office) exports between European multinationals and 16 Asian countries had grown by around 60% by 2007, before the recession hit in earnest. China is now European multinationals's main trading partner, representing a third of total exports and most imports.
However, this does not mean that European multinationals, the international lender par excellence of a not-too-distant era, has simply capitulated and opened its doors to a flood of foreign investment. The Chinese have made a deep footprint in European multinationalsan manufacturing, and expansion of the Chinese purchasing power outside of its own borders marches on. But even though trading has greatly increased, some barriers to entry for both imports and direct investment remain. European multinationalsans, like Americans, are no strangers to well-publicized cases of quality control disasters in Chinese-made products and are uncomfortable with China's human rights record. Trade disputes between China and the EU, including a dispute over intellectual property (IP), also dot the trade panorama.
The compromise in some cases has centered on a demand to keep business as usual in Chinese-owned companies in European multinationals. In other cases, multinational companies have applied European multinationalsan models of management and quality assurance to ensure compliance with regional standards and regulations. Directives still require over half of the total of parts and labor used in production on European multinationalsan soil to be ...