Blocking investment without evidence of political motive a de facto attack on business: China Daily

In its editorial on Feb 17, the paper expresses its disapproval of a petition from the authorities in Germany, France and Italy to the European Union for a veto right over Chinese high-tech takeovers.

Earlier this year, the former chief economist of Bank of China, Cao Yuanzheng, warned the Chinese business community that a change in their global operating environment was possibly on the way-a change from peaceful development of all businesses to ferocious competition.

We have already seen some high-level appointees in the United States administration of Donald Trump blaming the economic woes of the world's sole superpower on its trade partners from the developing world.

Now, as if to provide yet another footnote to ominous predictions about the future, there is news of a petition from authorities in Germany, France and Italy to the European Union for a veto right over Chinese high-tech takeovers.

This attempt has been interpreted by some European media as spearheading local politicians' growing desire to block any Chinese investments, either because they rely on "State funds" or because they serve a strategy to "buy up" European technologies.

In fact, in 2016, already as much as $75 billion (S$106 billion) worth of Chinese would-be overseas acquisitions were cancelled, seven times more than the previous year, due in part to the disapproval of governments in Western Europe and North America.

It is nothing new, admittedly, that all governments serve national interests. But if people are talking with common sense about business, they should know that if a company, backed by its proprietors or board of directors, has no intention whatsoever of selling its assets, no merger or acquisition will be on the cards and thus be a case for regulatory review.

Chinese people know full well that the time has long gone when a government could pursue economic expansion with such forceful means as gunboats and unequal treaties.

European politicians and officials should concentrate on the reform of their own economies instead of shadow-boxing with China.

Or, they could ask some third-party experts to do some research for them, just to check the volume of mergers and acquisitions in China, an economy of 1.3 billion people (compared with the some 500 million in the EU).

The data of a Chinese private equity company show that in the first half of 2016, China completed more than 1,518 domestic mergers and acquisitions (M&A) deals, in contrast with 107 overseas deals.

And, because of the tightening regulations on cross-border capital flows, Chinese overseas mergers and acquisitions are expected to decline this year.

Suspecting a voluntary business deal of serving a vaguely defined national strategy reflects a stubborn anachronism rather than reason.

And blocking investment with no hard evidence of political attachment or motive is a de facto attack on business.

China Daily is a member of The Straits Times media partner Asia News Network, an alliance of 22 news media entities.