Germany 'an appealing site' for expansion

As Chinese enterprises seek to build their global profile, Germany offers a target for those seeking a toehold in Europe, despite a troubled outlook for the debt-burdened region.

"Chinese investors have broad prospects in the German market, although they are still at a fledging stage and (the Ministry of Commerce) encourages competitive companies to invest in the country, actively developing mutually beneficial investment cooperation between China and Europe," Sun Yongfu, head of the ministry's department of European affairs, told China Daily.

Chinese companies have cumulatively invested $2 billion in the German market, representing only 10 percent of German companies' investment in China. But there is huge potential.

Germany Trade & Invest, the country's foreign trade and inward investment agency, has said that China leap frogged the United States and became Germany's largest overseas investor in 2011.

Influenced by the eurozone's debt crisis, Germany's economy is predicted to expand less than 1 percent this year.

"Given the current global economic situation, Chinese companies have good opportunities to invest in Germany ... and mergers and acquisitions can be good avenues for investment," said He Weiwen, co-director of the China-US-EU Study Center at the China Association of International Trade.

European companies are probably undervalued due to the debt crisis, and it's a good time for Chinese companies to tap into the European market through M&A deals, according to He.

The debt crisis has opened a door. The market value of the eurozone's 50 biggest companies fell 17 percent in 2011, though it has recovered about 8 percent this year, Reuters reported.

China's M&A investment in Europe accounts for 34 percent of its total overseas direct investment.

Chinese companies have been exploring investment opportunities in Germany, Europe's largest economy and home to many companies famed for technological know-how and mature brands, which are especially attractive for Chinese companies.

Officials at Germany Trade & Invest told Chinese media that many Chinese enterprises are seeking opportunities to develop their own brands and technology by investing in Germany, instead of solely acting as raw materials suppliers.

According to He, China's investment should focus on advanced technology and renewable resources.

The EU is China's most important source of technology and top trading partner.

Germany is China's most important trading partner in the European bloc.

To transform its economy, China needs to increase imports of equipment, key spare parts and better-quality consumer goods from Germany, combining Germany's industrial advantage and China's market demand, Sun said.

In 2011, bilateral trade reached $169.2 billion, up 18.9 percent from a year earlier, accounting for 30 percent of the nation's total trade with the EU.

When visiting China in February, Germany Chancellor Angela Merkel said China is likely to become Germany's biggest trading partner. At present, China is Germany's third-largest trading partner, following France and Poland.

Experts say capital inflows stemming from China's rising trade and investment in the Europe may help Europe with its debt crisis.