Chinese high-tech foreign direct investments in the EU – trends and policy responses

Abstract

This paper aims to examine the trends of Chinese high-tech acquisitions in the EU countries, describe the policies that these acquisitions prompted on the level of member states and the EU, and analyze the effects of these policy responses. The results of the research review clearly show an increasing number of takeovers of European companies in the high-tech sectors, especially in the big member states such as Germany, France, or the UK. This created a backlash from the European policymakers that led to an introduction of tighter screening regimes in many EU member states and the creation of a common EU framework for FDI screening and its strategic management. At this point, it is hard to evaluate the complete effect of this new framework, but it must be concluded that 82 percent of the Chinese strategic acquisitions made in 2018 would fall under at least one criterion of the new EU framework. The findings of this paper provide sound recommendations for the EU countries and their public authorities targeting to control Chinese outward foreign direct investment (OFDI) and limit the acquisition of local companies in sensitive industries. On the other hand, the coming recession may put at least a temporary halt on Chinese acquisitions of the European companies. Acknowledgment This paper is the partial result of the GAAA – Grantová agentura Akademické alliance grant project No. GA/6/2019 – Strategic Performance Management of Companies and Multinational Corporations in the Context of Globalization and Sustainability.

Accessing the Impact of FDI Goals on Risk Management Strategy and Management Performance in the Digital Era: A Case Study of SMEs in China

“…Risk response, RM, and performance were not significantly affected by HRs in hazard RM. As Dudas and Rajnoha [73] found, the possibility of withdrawal has a positive impact on rather than the management of risk, as indicated by this study. The market condition in the host country disappears if tax laws and regulations frequently change, subsidiaries have an advantage in local management, and the environment degrades [7,74].…”

“…Companies seeking market share would not withdraw subcontractors or give up business from a large company. However, efficiency-seeking companies would withdraw operations from China or reverse their decision to return to foreign operations because tariffs on these components can increase production costs [73,74]. It has also been found that those businesses that pursued differentiation strategies (strengthening brands, quality, and customer service) had the most significant impact.…”

“…As a result of factors such as rapid increases in labor costs and land prices, if the domestic market is unable to secure competitiveness, efficiency-seeking manufacturing businesses may have difficulty surviving. It is, therefore, more likely that Chinese subsidiaries will withdraw from the market or factories will move to neighboring Southeast Asian countries [8,58,73].…”

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China’s Belt and Road Initiative in the Contested Eastern Neighborhood: A Case Study of Ukraine

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