BIEJING: Europeans still remain nervous about the Chinese taking over their companies, according to a senior European business figure in China.

Davide Cucino, president of the European Union Chamber of Commerce in China, said many European companies would opt to be taken over by another European or US company rather than a Chinese one.

“I have to tell you frankly that when there are deals involving rivals bids, a company might prefer to sell to another European business rather than one from China,” he says.

Cucino, who heads China operations for Finmecccanica Group, the leading Italian engineering conglomerate, says it was wrong to assume that it was only the United States that was wary about Chinese investment.

“There still remains a feeling of uncertainty when considering an investment that comes from China. You have the unions, government leaders and the consensus of public opinion that are reluctant to see beyond the negative aspects to see the positive side of these investments.”

Cucino, who was speaking in the chamber’s offices in the Lufthansa Center in Beijing, said the Chinese government was right to target increasing ODI since it was important that China had more global companies.

He points out that many of the current 89 Chinese companies in the latest Fortune 500 list conduct most of their business just in China.

“China wants to create more national champions. If you look at some of the companies among the biggest 500, some of them have very minor international elements.

They are there because of their size but they have the potential to become more international,” he says.

The chamber president added that ODI is a way for Chinese companies to build the expertise to become more globally competitive.

“They need to understand about governance, learn new skills and be more prepared for the pace and challenges of international markets,” he says.

Cucino, who has been in China for 26 years, says that a lot of Chinese ODI is still “under the radar” with Chinese companies taking stakes in small and medium-sized enterprises and buying up the research and development arms of businesses.

“Many of these are not big companies but they often have the sort of high-end technology that Chinese companies don’t own yet.

There are also a lot of companies in Europe with good products but that are not in good financial shape because of the financial issues that are happening in Europe,” he says.—Asia News Network