Chinese firms making inroads

43 billion euros ($47 billion) is the sum that state-owned China Chemical National Corp (ChemChina) is willing to pony up to acquire Switzerland's Syngenta, a producer of seeds and pesticides. If the transaction is completed, it would mark the biggest ever investment by a Chinese company in a European nation.

And the 43 billion euros in question would easily eclipse the total of 22 billion euros spent by Chinese investors in Europe throughout last year.

ChemChina wasn't particularly inactive in 2015 either. For 7 billion euros, the company secured a share in Italian tire maker Pirelli, while shelling out an additional 1 billion euros for German machine tool company Krauss-Maffei. Activities like these let some people shudder as they fear a complete buyout of the Western world.

That's nonsense!

Chinese companies, however, are only doing their homework. They're in the process of implementing what the Communist Party of China has conceived for them. After all, the Chinese aim to shed their image of being the world's factory that floods the globe with cheap products - even though Apple iPhones are anything but cheap despite being made in China.

What's true is that China has no other choice than to radically overhaul its economy. It needs to make inroads into high-tech sectors, and that's why it has its sights set on high-tech companies in Europe, among them firms with interconnected production methods (Industry 4.0 leaders). So, looking for acquisitions in countries such as Germany makes sense for the Chinese, doesn't it?

No need to be afraid

Fabulous things happened when the deal was struck between ChemChina and Krauss-Maffei three weeks ago. The new owners were unanimously welcomed by both management and employees. Even the trade union on the ground was full of praise. Small wonder as the Chinese had promised to safeguard existing production facilities and jobs, adding even that new jobs would be created.

Of course, only time will show to what extent the Chinese are willing to stick to their promises. In France, for instance, US giant General Motors is currently slashing lots of jobs after taking over Alstom, instead of creating them as it had promised.

German small and medium-sized companies have so far not really been in for any nasty surprises in the hands of their Chinese investors. Moreover, most of these firms view the Chinese as an opportunity to access China's market more easily.

And let's not forget: despite its current weakness, China is set to remain one of the world's most attractive markets for a long time to come.

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