“There are a lot of deals that the Chinese cannot take on. If the Chinese government sees a company making a bid for troubled assets that risks provoking a political backlash in Europe, I think they’d step in to make sure there’s no embarrassment for the Chinese side,” he said.
The failure of Chinese firms to buy Saab, the Swedish carmaker that was declared bankrupt last week, was a telling example of the difficulties facing Chinese investors, Hanemann said.
However, the picture is not black and white. After all, Volvo, another Swedish carmaker, was acquired by a Chinese rival from Ford Motor Co last year.
Christine Lambert-Goue, managing director in Beijing at Invest Securities China, said companies were not looking mainly for outright acquisitions, but for brands, patents and technology that would bolster their position at home.
“Companies are only ready to pay for assets from Europe that will enable them to gain market share in China,” she said.
Investment in Europe will take off eventually, but a deteriorating political climate represents an obstacle in the short term, said Jonathan Holslag of the Brussels Institute of Contemporary China Studies.
The EU, like the US, is talking tough about Chinese “state capitalism” and is crafting a more assertive trade policy to counter what it sees as a playing field tilted against foreign companies.
For its part, Beijing smells protectionism in the air in response to its growing economic clout.
“The European Union is disappointed with the reluctance of Beijing to open its economy further, whereas Beijing complains about Europe being too reluctant to share its knowledge or to allow Chinese investors to expand their presence in important sectors like infrastructure,” Holslag said.
And if Europe fails to snap out of its economic malaise, the risk is that a super-competitive China will be made a scapegoat.
“The more governments are confronted with high unemployment figures, the more we will start to see China as a challenger rather than as a savior,” Holslag said.