The article written by Danilo Taino on Corriere della Sera repeats the same topics I’ve already treated in the past: the European Union is beginning to wake up from the torpor and it’s starting to understand that China has a model of economic development with which the EU cannot compete. It is, at this point then, that the ambassadors of all countries (except for Hungary), sign a “protest” document against the initiative of the “New Silk Road” and try to stop the progress of China and to limit its investments in Europe.
However, two important points are missing in the article, respectively:
1) not all the investments are the same: there are acquisitions of existing companies and investments in green-field. The EU, on the other hand, does not differentiate between these two types and it would like to limit both of them. This is wrong. Only the investments in the existing companies have to be well monitored, an issue that I’ve already repeated for several years, being accused by the so-called liberals, to be a protectionist. Green-field investments, on the other hand, shouldn’t be limited but should also be encouraged. EU should invite the latter type of investments because they bring new capital, new jobs with consequent positive effects on the territory;
2) the urgency with which the 27 representatives (Hungary excluded) of the EU have raised their voices, it is not due to a sudden awareness of Brussel, with a substantial take to heart of the fate of EU citizens, but was a choice dictated by Germany, subject to acquisitions, from part of Chinese companies (like Kuka in particular), perceived as predatory. Perhaps Germany has realized that all this commercial liberalism does not bring important advantages. And then, as often, the EU (namely, Germany), raises its voice.
Finally, a feeling that can be perceived by analyzing the numbers of Chinese investments in Europe. Italy received a total of approximately 33bln USD from China, of which the only 1bln in green-field. Now that we are fighting, in order to bring more Chinese investments to Italy, with the above conditions – capital and jobs – what Europe (i.e. Germany) does is saying that: “Stop to all investment operations, even for the green-field ones.” Isn’t it strange? Exactly when in Italy a new government is going to be formed.
Michele Geraci is a Senior Research Fellow and Head of GPI China at the Global Policy Institute (GPI) in London.
This article originally appeared on Michele.Geraci.com