China is using its growing economic strength to buy up strategic assets in Europe, from companies to government debt and infrastructure contracts. A new brief published by ECFR – The Scramble for Europe – explores the extent and nature of China’s game-changing presence in Europe.
China has moved on from buying African ports and building Saudi railways, taking advantage of its economic strength and European weakness to buy up Europe. Its acquisitions include infrastructure such as ports and railways, symbolic car companies like Volvo and MG, and high tech firms. It has bought large quantities of debt in the EU’s troubled periphery and won government contracts while excluding European companies from bidding for Chinese contracts.
The report’s authors, Francois Godement and Jonas Parello-Plesner, argue that:
European supply is fed by the short-term need of cash-strapped countries, but this threatens Europe’s medium term interests.
China’s acquisitions are dividing European countries, just as they were developing a more coordinated and tougher strategy towards Beijing.
The crisis is allowing Chinese companies not just to strike cut-price deals but also to play off member states against each other and against their own collective interests – a strategy China has already used in the developing world.
If China wins support for its policies with this greater influence, Europe may pay the price on a range of issues, from global financial reform and international governance to environmental norms and human rights.