Trade Tensions Drive Chinese Auto Investors from US to Europe
STOCKHOLM—Chinese auto investors are increasingly pouring money into Europe rather than the United States because of intense U.S. scrutiny of their deals under the Trump administration, according to Reuters news service. More than a dozen leading merger-and-acquisition bankers, lawyers and consultants told Reuters this week that the number of mandates from Chinese clients to make investments in the European auto sector were increasing, while those for the U.S. sector were declining.
“Given the way that things are tightening up in the United States, Europe for China is the most obvious non-domestic market that they’re pushing into,” says Charlie Simpson, who specializes in the auto sector for consultancy KPMG’s global strategy group.
The trend, which comes as Washington is locked in a trade battle with Beijing, is supported by an analysis of data of auto sector investment in the U.S. and European markets.
The United States accounted for 26 percent of the total number of Chinese deals in either of the markets in the first five months of this year, according to the figures from Thomson Reuters and research group Dealroom. That is down from 31 percent in the same periods of 2017 and 2016.
There have been 19 deals in total across both markets so far this year, worth more than $10 billion, according to the data.