Abstract: The rapid growth of Chinese investment in the Netherlands has been cause for both excitement and anxiety. Many of the companies and other investors are still unknown and the background and objectives of their investment often remain unclear. This research takes a close look at fourteen Chinese companies that vary in size, ownership form, mode of entry, age and sector. We explore the objectives, background and internal dynamics of these companies and focus on the challenges they are facing both in the Netherlands and China. Our most important findings are the following:
1. The overall presence of Chinese companies in the Netherlands is still modest, despite rapid growth in recent years. The level and overall economic impact of Chinese investment in the Netherlands is still much less than that from other major economies in the world (US, Japan). The Netherlands also lags behind other major European economies. To take advantage of China’s economic growth and global rise, the Netherlands needs more, not less Chinese investment.
2. We should avoid a simple binary division between political and commercial motivations behind Chinese investment in the Netherlands. Chinese central and local governments, the Communist Party and state-owned and private companies are connected in a complex symbiosis. Government policy, company strategy and even personal considerations all play a role in determining the objectives, destinations and volume of investments abroad. Dutch businesses and policy makers therefore need to assess carefully what the strategic implications of specific investments might be, instead of simply making a choice either in favour of or against Chinese investment.
3. Although the Dutch domestic market is small, it is attractive to Chinese companies because of its favourable regulatory and tax regime, high-quality business services, safe and stable society, well-organised government, connectedness to other European countries, nationwide English proficiency, and pragmatic business attitudes. The Netherlands is an excellent stepping stone to explore the much larger European market. The Netherlands should build on to these advantages to attract Chinese investors who are deciding on a location for their business in Europe.
Many Chinese companies are here for the long term and are eager to learn and adapt to the local business environment. They are very aware of the huge cultural differences between China and Europe and their own lack of international experience, often amplified by a romanticised image of Europe. This provides the Netherlands with the opportunity to mould Chinese companies into enterprises that fit a Western economy and society. Through engagement and regulation, the Netherlands has the chance to help shape Chinese multinationals in the making.
All in all, business encounters with China, an emerging superpower, are inevitable and essential for the Netherlands to maintain and enhance its position in the world. The presence of Chinese companies provides opportunities to accumulate knowledge and expertise on China and to building bridges and trust.
Publication Year: 2017
Publication Date: 2017-02-01
Language: en
Type: article
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