Insights

Dr Nikolai Muscat Farrugia was invited to speak at a session entitled “Is Europe ready for increased levels of Chinese investment?”, that was presented by the European Regional Forum of the International Bar Association on the 9th of October during the IBA Annual Conference 2017 held in Sydney, Australia.

Chinese outbound foreign direct investment into Europe jumped to almost €35 billion in 2016. This stands in stark contrast with a further drop in investment by European firms in China. The growing imbalance in two-way FDI flows, persisting asymmetries in market access and increased Chinese acquisitions of advanced technology and infrastructure assets have spurred heated debate about related risks among European policymakers, regulators and the broader public. The rapid growth of this investment activity by Chinese companies and the increasing capital outflows have also triggered a re-tightening of administrative controls by the Chinese authorities. It is in this context that the session looked at the issue both from a Chinese and European perspective.

Among other matters, the speakers discussed:

• The current challenges facing Chinese investors in obtaining the necessary approvals and financing in China;
• How the pace of outbound investment was set to be affected by the decisions coming out of the 19th National Congress of the Communist Party of China;
• How Chinese investors approach a potential new investment into Europe and what the principal challenges (both regulatory and cultural) are for both European targets and Chinese investors in implementing these transactions;
• How more effective structures can be developed to enable two-way investment between Europe and China to flourish.

Dr Muscat Farrugia also spoke about the regulatory regime for Foreign Direct Investment in Malta, working with Chinese investors in Malta and the legal and cultural challenges that may arise when implementing deals involving such investors.