Master’s Degree programme
in Language and Management to China
(D.M. 270/2004)
Final Thesis
Chinese investments in Italy in
energy from renewable sources
A financial analysis on companies’ profitability
Supervisor
Ch. Prof. Giorgio Stefano Bertinetti Graduand
Silvia Sirca
Matriculation Number 865888 Academic Year
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For the highs and lows And moments in between, Mountains and valleys And rivers and streams. For where you are now And where you will go, For “I’ve always known” And “I told you so,” For “nothing is happening” And “All has gone wrong,” It’s here in this journey You will learn to be strong You will get where you’re going, Landing where you belong
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Index
前言 ... 4
Introduction ... 8
1. China’s outward FDI ... 13
Introduction ... 13
Dimension of investments ... 14
Reasons to invest abroad ... 16
Characteristics of outward FDI ... 18
Policy measures ... 23
New administrative measures ... 24
Perception of China’s investments in host countries ... 26
The position of the governments ... 33
Chinese influence on the global economy ... 34
2. China’s outward Foreign Direct Investments in Italy ... 37
2.1. Introduction ... 37
2.2. Dimension of investments in renewable sources ... 39
2.3. Investments in renewable sources in Italy ... 40
2.4. Reasons to invest in Italy ... 41
2.5. The Italian Government position ... 43
2.6. National incentives for investments in energy from renewables ... 45
2.7. Focus on Regions in which Chinese investments are gathered ... 47
2.8. Regional measures for investments in energy from renewables ... 49
2.9. Characteristics of Chinese investors ... 55
2.10. Characteristics of shareholders ... 65
3. Financial comparison between Chinese and Italian companies ... 69
3.1. The method of analysis ... 69
3.2. Financial Comparison ... 74
Conclusions ... 133
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前言
最近几年，在意大利市场的中国投资增长的非常快的速度，
中国投资者成为意大利经济的重要参与者。量化这些投资的维度，
部门，地区，与这些投资直接和间接相关的人数，是经济学家，政
治家和一般公众舆论提出的最常见问题之一。由于几个原因，在意
大利的投资维度的完整，详尽的分析是不可能的。第一个原因是这
种投资的维度本身：非常大；其次，它们遍布全国的许多部门。
此外，还没有关于这些投资的数据库。要确切地确定中国在意大利
投资了多少资金是非常不可能的，即使经过多次研究，也没有一项
是完整和完美的。例如，在2018年，彭博社进行了一项研究，以确
定中国在2007 - 2017年期间在欧洲的投资额，但这种分析只是关于
中国对资产的购买和投资，其详细信息已经披露; 其他合并，投资
和合资企业未包含在本文件中，因为没有数据。 因此，可以肯定
地说，完整的文件包含了所有中国投资是不可能完成的。 注销一
份文件，确定中国在意大利投资的规模并不是这部著作的目的。
在这部著作中，重点只放在中国公司投资的一个领域：从可再生能
源生产能源。
从这一点开始，我分析了中国投资者资助的意大利公司的规
模，收入和盈利能力，并将结果与同一行业的公司进行了比较，类
似于维度和收入，以确定盈利能力是否有相似之处。通过AIDA和
ORBIS数据库的研究收集数据，其中可以选择按行业和维度划分的
公司，并在同行之间进行比较。分析不仅限于中国公司的盈利能
力，而且还关注中国母公司，分析他们在中国和世界其他地方的业
务，以更好地了解为什么它们选择在意大利投资。
分析的开始从一些问题开始,例如：中国企业家投资哪些部
门？ 在意大利中国的投资有多么分散？除了最大的投资，以及中
国传统投资最分散的行业，还有进出口、零售、餐饮、等等，中国
投资在哪里聚集？回答这些问题以后，出现了其他问题，例如：这
些公司的盈利能力是多少？与意大利公司相比，他们的表现是好还
是坏？
根据意大利商会2017年公布的数据，至2017年6月30日，在意
大利的中国企业家数量为70.107。中国人最为分散的部门是商业
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（零售和批发），制造业和餐馆。这些数据并不奇怪，实际上中国
传统地投资于这些行业，而在公众看来，中国与这些部门有关。
引起我注意的数据是与能源有关的数据。在表中没有关于能量的
细节，也没有说能量究竟意味着什么，如果是生产的还是传输的还
是销售的。 这是这部著作的起点，寻找有关能源的信息，重点关
注在意大利生产能源的中国企业。
该分析从AIDA开始，仅关注中国公司与竞争对手相比的收入
和盈利能力，但后来也关注股东和母公司。这一决定是为了更好地
理解投资意大利选择的原因，并从不同的角度分析投资，而不仅仅
是从金融角度。在大多数情况下，公司不是独立的，而是中国集团
的子公司，它们控制意大利公司。在欧洲和意大利拥有复杂的子公
司系统，每个子公司都有自己的任务，在最低层面，有子公司生产
能源，由其他涉及建设电力传输基础设施的子公司控制，然后由中
国母公司直接控制的金融公司控制。
结果令人惊讶，事实上，如果只关注AIDA采取的数据，公司
似乎聚集在米兰，最深刻的分析表示了另一个现实，就是说：只有
法律办公室在米兰，操作总部，生产能源的工厂，主要在意大利南
部。收入和盈利率不仅是能源生产的结果，而且是产生能源的传输
和销售的最重要因素，因为工厂与国家电网相连。
这部著作分为三个主要部分：第一个部分是对全球中国投资
的一般分析，讨论了海外投资决策的原因，中国政府对此类决策的
影响，以及政策和行政措施。后来，分析转向外部，谈论中国在海
外投资的看法，以及各国如何看待它们。公众舆论对外国投资的看
法和感受，在这个具体案例中关于中国投资的，是与国家不同，欠
发达国家认为中国投资是增长和发展的机会，而发达国家都害怕中
国感兴趣敏感技术及其存在可能会引起安全问题。
第二个部分是关于中国在意大利投资的可再生能源领域。 在
本章中，我试图回答有关中国外国直接投资的最常见问题，比如说
投资维度，投资原因以及意大利政府对中国投资的立场。分析是做
的通过政治的观点，查看激励意大利这种投资的法规和措施，以及
是做的通过区域观点，试图找到选择一个地区反而另一个地区的原
因。本章的第二个部分重点介绍意大利投资的公司，我分析了子公
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司，母公司和董事会的组成。在这种情况下，我分析了母公司的活
动，它们在中国做什么。所有母公司都是大集团，跨国公司，总部
设在中国，而在全球范围内工作，涉及太阳能电池板的生产和安
装。 研发部门和工厂都在中国，国外有能源生产投资。
最后，第三个部分是对意大利生产能源的中国公司的财务分
析以及与意大利公司的比较。 数据是通过AIDA数据库收集的，首
先我把数据放在表格上然后转换成图形。目的是通过财政观点，了
解中国管理公司在意大利所做的事情，分析其在同一业务中与同类
意大利公司相比的盈利能力。考虑的比率是ROS，ROA，ROE和ROI，
以及公司的债务状况。考虑这一比率的选择是因为当前或潜在投资
者考虑的因素，并且因为它们在同一业务的公司内很容易比较。每
家中国公司与其他八家规模和收入相似的公司相比，以了解这些公
司的业绩。为了是比较更容易，并且快速了解谁在做更好， 首先
我把数据放在表格内， 然后我把它们放在图形上。 每次使用两个
比率。
重点放在财务分析上，将中国管理公司的盈利率与意大利公
司的盈利率进行比较，看看哪家公司做得更好。在大多数情况下，
中国的结果是积极的，中国公司表现良好，竞争非常激烈，可以被
列入最高层。如果从外部看到这些公司，来自潜在投资者，情况是
积极的，他们能够通过销售和股权投资产生收益;他们没有债务，
债务/股权的比例在大多数情况下等于零，中国公司不希望有债
务，如果发生债务，他们能够偿还债务。将注意力转移到母公司已
经发现，主要是在意大利投资的大集团，而非单一投资者，在中国
的集团活动始终处于可再生能源领域。他们在家做什么，他们在国
外复制。母公司参与太阳能电池板的生产和研发，因此不仅仅是制
造，而且还包括新的和先进的解决方案的研究。这方面很重要，因
为在共同的想法中，中国只是一个大工厂，是世界上最大的工厂，
但在过去几年情况正在发生变化，中国正在填补与西方国家利用和
发展最先进技术的技术差距技术。能源生产形成可再生能源是意大
利和西方世界的一个关键部门，一直受到极大关注，近年来投资蓬
勃发展。愿意在意大利和外国这一领域投资的公司找到了一个舒适
的环境，制定了规范和法规，旨在促进可再生能源的发电。中国对
此非常了解，事实上，它在意大利市场上有很多公司和更多的生产
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工厂。可再生能源的未来在不断变化，新的参与者正在兴起，不再
是一个只有大型国有企业可以投资的封闭部门，外国投资者每次都
更感兴趣并且渴望扩张，中国就是其中之一，它的愿望是进入新市
场很大。中国已经能够通过获取技术填补技术空白，成为最发达的
欧洲国家或美国一级的可再生能源生产能源最重要的国家之一。
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Introduction
In recent years Chinese presence in Italian market has grown at a very fast pace, becoming an important player in Italian economy. Quantify the dimension of these investments, the sectors, the regions, the number of people directly and indirectly linked to these investments, is one of the most common questions asked by economists, politicians and public opinion in general. A complete, exhaustive analysis on the dimension of investments in Italy is impossible for several reasons. The first is the dimension itself of such investments, very big, and second, they are in many sectors in all the country. Furthermore, a database on these investments does not exist. It is quite impossible to define exactly how much money China invested in Italy, even if tried with several studies, none of them is complete and perfect. For example, in 2018 Bloomberg made a research to define how much money China invested in Europe in the period 2007-20171, but this analysis is only about China’s purchases and investments in assets whose details have been disclosed; other mergers, investments and joint ventures are not included in this document because data are not available. For this reason, it is safe to say that a complete document with all the Chinese investments is quite impossible to be done. Write off a document identifying the dimension of Chinese investments in Italy is not the aim of this work. In this work the focus has been put on just one sector in which Chinese companies invested: the production of Energy from renewable sources.
Starting from this point I analyzed the companies in Italy financed by Chinese investors, their dimension, revenues and profitability, and compared the results with companies in the same sector, similar for dimension and
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revenues to see if there were similarities also in profitability. Data were collected through a research in the AIDA and the ORBIS database, in which is possible select the companies divided by sector and dimension and make a comparison between peers. The analysis is not just limited to the profitability of the Chinese run companies, but attention has also been put on the Chinese parent companies, analyzing their business in China and in the rest of the world, to better understand the reasons beside the choice to invest in Italy.
The beginning of the analysis moved from questions like in which sectors Chinese entrepreneurs invest? How diffused are the investments in Italy? Apart from the biggest investments, and the most diffused sectors in which China traditionally invests, as to say import-export, retail, catering, where are China investments gathered? Answering to these questions other questions arose such as which is the profitability of these companies? Compared to Italian run companies are they doing better or worse?
According to data published by the Italian Chamber of Commerce on 20172, at the date of 30 June 2017 the number of Chinese entrepreneurs in Italy was of 70.107. The sectors in which Chinese presence is the most diffused are commerce (retail and wholesale), manufacturing and restaurants. These data are not surprisingly, in fact China traditionally invested in these sectors, and in public opinion China is linked to them. A data that captured my attention was the one related to Energy. In the table there are not details about energy, it is not said what energy exactly means, if production, transmission, sale. This was the starting point of this work, looking for information about energy, focusing on Chinese run companies producing energy in Italy.
2 http://www.pd.camcom.gov.it/gestisci-impresa/studi-informazione-economica/dati-e-analisi-economiche-1/dina
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The analysis moved from AIDA, focusing at the beginning just on the revenues and profitability of Chinese companies compared to its competitors, but later the attention has been put also on shareholders and parent companies. This decision has been taken to better understand the reasons beside the choice to invest in Italy, and analyze the investments from different points of view, not just the financial one. In most of cases companies are not independent ones but subsidiaries of Chinese groups, they control Italian companies with a complex system of subsidiaries located in Europe and in Italy, each subsidiary has its own task, at the lowest level there are subsidiaries producing energy, controlled by other subsidiaries involved in construction of infrastructures for the transmission of electric energy and telecommunications, these are then controlled by financial companies directly controlled by the Chinese parent company.
The results have been surprisingly, in fact, if focusing just on the data taken by AIDA the companies seem to be gathered in Milan, a deeper analysis showed another reality, as to say: just the legal offices are in Milan, the operative headquarters, the plants where the energy is produced, are mainly in Southern Italy. The revenues and the profitability ratios are the result not just of production of energy, but above all of transmission and sale of the energy produced, because the plants are connected to the national grid.
This work is divided in three main parts: the first one is a general analysis of Chinese investments worldwide, talking about the reasons beside the decision to invest abroad, Chinese government influence on such decision, as to say policy and administrative measures. Later the analysis moved on the external side, talking about the perception of Chinese investments abroad, how they are seen by nations. What public opinion thinks and feels about foreign investments, and in this specific case about Chinese investments, is
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different from country to country, less developed countries perceive Chinese investments as an opportunity to grow and develop, while most developed countries are afraid that China is interested in sensitive technologies and its presence could give rise to security problems.
The second chapter is about Chinese investments in Italy, in the field of energy from renewable sources. It has been tried to answer to the most common questions about Chinese foreign direct investment, its dimension, the reasons to invest here and the Italian government position toward Chinese investments. The analysis has been done by the political point of view, looking at the regulations and the measures to incentive this kind of investments in Italy, and the regional point of view, trying to find the reasons beside the choice of one region instead another. The second part of the chapter is focused on the companies that invested in Italy, analyzing the subsidiaries, the parent companies and the composition of the board of directors. In this case has been analyzed the activity of the parent companies, what are they doing in China. All the parent companies are big groups, multinational, based in China and working worldwide, involved in production and installation of solar panels. R&D departments and factories are in China, abroad there are investments for energy production.
Finally, the third part is the financial analysis of Chinese companies in Italy producing energy and their comparison to Italian companies. Data are collected through the AIDA database and were first put on a table and then transformed in graphics. The aim is to see what Chinese managed companies are doing in Italy, by the fiscal point of view, analyzing their profitability compared to similar Italian companies in the same business. Ratios considered are ROS, ROA, ROE and ROI, and the debt situation of the companies. The choice to consider this ratio has been made because are those considered by
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current or potential investors, and because they are easily comparable within companies in the same business. Each Chinese company is compared to other eight companies similar in dimensions and revenues, to see the results of the companies. To make the comparison easier, and to quick understand who is doing better data are first put on a table and then on graphics, using two ratios per time. Thanks to the graphics we can easily see where the Chinese company is compared to its competitors. At the end there is a final table that is the sum of all the other tables and show in which percentage Chinese companies are better or worse than their competitors.
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Chapter I
1. China’s outward FDI
Introduction
Since 1978, the year in which Deng Xiaoping started the Chinese economic reform and the opening-up (改革开放)3, world economic situation has changed, and of course Chinese too. China is now one of the most important players in the world economic scenario, playing a very important role. According to CEIC data4, China’s Foreign Direct Investment in December 2017 increased by 80.4 USD billion, with an increase of 32.9 USD billion compared to the previous quarter. This means that Chinese presence is every time more important and consistent, and its importance is going to grow more and more in the future. According to the research of Karl P. Sauvant and Michael D. Nolan5 China’s outward FDI will continue to rise, with one source projecting US$1-2 trillion in global Chinese outward FDI from 2010–20. This prevision is confirmed by the Statistic published on March 2018 by the Ministry of Commerce of People’s Republic of China6: data refer to China’s direct investment overseas in January and February 2018, the Chinese investors made a direct investment of 119.64 billion yuan, going up 8.7% year on year (equivalent to US$18.73 billion). Among these, Chinese investors made a non-financial direct investment in 1,429 overseas enterprises of 135 countries and regions, with
3 “Opening up” policy was adopted by Deng Xiaoping in 1978, its aim was to promote, for the first
time after the foundation of the People’s Republic of China in 1949, China opening to international trade and foreign investments. The results are evident, becoming China the first destination of investments from 1978 to the beginning of the 21st Century.
4 https://www.ceicdata.com/en/indicator/china/foreign-direct-investment
5 China’s Outward Foreign Direct Investment and International Investment Law Karl P. Sauvant and
Michael D. Nolan Journal of International Economic Law, 2015, 18, 893–934 doi: 10.1093/jiel/jgv045
6http://english.mofcom.gov.cn/article/statistic/foreigntradecooperation/201804/20180402732582.s
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an investment of 107.44 billion yuan, up 16.3% year on year (equivalent to US$16.82 billion).
Dimension of investments
Quantify Chinese outward FDI is one of the most common questions. Because of the growing importance and presence of China in the global scenario, medias put big attention on China’s FDI data. China’s outward FDI have increased dramatically in recent years, becoming China one of the most important players in the global economy. Chinese companies have become to be more present since the global crisis in 2008-2009. According to the data published by thediplomat.com7, Chinese outward FDI in 2007 accounted for the 4% of total flows, becoming more than 10% per year since 2009, reaching the record of the 16% in 2016. There is no doubt that Chinese outward FDI are consistent, in 2017 Chinese investors spent a total of $120 billion8, a very big sum, but in decline respect the previous year data. Nowadays Chinese companies hold close to 11% of all FDI assets globally, second only to the United States, and double the FDI of British, German and Japanese companies. Which is the reason of such decline? The first reason is the regulations introduced by Chinese Government in August 2017, to limit “irrational outbound investments” as defined by the Ministry of Commerce those investments that do not respect the Guidelines; as to say investments in real estate, hotels, cinema and entertainment that are restricted, and in sectors like gambling that are forbidden. The sectors that received the most of investments in 2017 were leasing and commercial services; wholesale and retail; and information technology. In this scenario a very important role is played by the Belt and Road Initiative: outward FDI to countries involved in this initiative
7 https://thediplomat.com/2017/12/how-chinese-fdi-will-transform-the-global-economy/ 8http://www.chinadaily.com.cn/a/201801/16/W,S5a5dab1ea3102c394518f95c.html
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have been encouraged. According to the data released by the Ministry of Commerce,9 in 2017, Chinese investments addressed to the Belt and Road Initiative totaled 14.4 USD billion in 59 countries. BRI is a very important project, proposed by president Xi Jinping in 2013, with the aim to create a modern-day Silk Road trade routes from Asia to Europe and Africa through massive investments in infrastructures like railways, ports, power plants. China’s investments in Belt and Road countries are driven mainly by state-owned companies and in October 2017 was added to the Communist Party constitution as a political priority.
Despite a contraction in investments the BRI is still going on. Analyzing the data released by the Ministry of Commerce,10 for the first two months of 2018 is possible to see a decrease in investment, for January the investment stood at 2.28 USD billion, with a decrease of 30.9% respect the same month of the previous year; but it is safe to suppose that this decrease is temporary, and that in the next months we will see a new vigor in this initiative due to the great importance put by President Xi Jinping.
Thinking about China’s investments in Italy the first thought goes to the most famous Italian companies bought by Chinese companies, as to say Pirelli, Krizia, FC internazionale, Milan AC, just to say some, but the number of Italian companies that changed ownership in the last years is high, the money China invested in Italy is growing at a very fast pace. Estimate how much money China has invested in Italy is not so easy, Bloomberg11 tried to show the numbers of Chinese presence in Europe and in Italy in the last 10 years. Bloomberg’s analysis shows that «China has bought or invested in assets
9 https://gbtimes.com/chinese-investment-in-belt-and-road-countries-remains-stable-in-2017 10
https://gbtimes.com/chinas-outbound-belt-and-road-investment-decreases-in-january-february
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amounting to at least $318 billion over the past 10 years.». Despite the big work done, this is not complete, in fact by this analysis are excluded «mergers, investments and joint ventures […] for which terms were not disclosed.», Bloomberg estimates that should be added an additional total value of $13.3 billion. Finally, greenfield developments or stock-market operations are not included in Bloomberg’s analysis, we are talking of at least $40 billion. This analysis even if not complete can help us to understand the dimension of investments, answering to the most common question of how much Chinese money there is in European market. For what concern the first question, as to say, the dimension of investments in Italy, according to Bloomberg’s data, in the last 10 years China invested at least $22,966 million, with a peak of $9,499 million in 2015, the year in which Pirelli was acquired by ChemChina for $7.7 billion.
Reasons to invest abroad
There are several reasons beside the Chinese choice to invest abroad. One of the most important is resource-seeking, in fact, China is short of petroleum and natural resources, and its increasing economic growth needs them in high quantities. But this is not the only reason: resource-seeking is a reason valid mainly for Africa and Asia countries; a second reason, valid for investments all over the world and in developed countries, is the desire to have direct access to markets through direct investment, in opposition to trade. Outward FDI in the most developed countries are characterized by the need to acquire technology, in fact, China needs the most advanced technology to be able to compete with America and Europe, but has not enough time to develop it, the fastest way to get it is only by buying technology through FDI. China in 2016
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has invested in Europe 35 billion €12, compared to 1.6 billion € invested in 2010 make us understand the level of involvement and the growing importance that Europe has for China. European economy is very attractive for Chinese investments, they can find the features they seek, as to say technology, access to European market and to third markets, and a stable legal and political environment. A third reason to consider is efficiency-seeking; China cost of labor is lower than developed countries but compared to developing countries or underdeveloped countries is higher, for maximize the revenues China is orienting its investments to these countries, that are Asian and African. Considering the financial factor, FDI are important also because give rise to bilateral investment treaties, allowing to reduce the amount of taxes or even avoid them.
What about the reasons beside the Chinese decision to invest in Italy we can summarize them in market-seeking and strategic asset seeking. Italian economy is the seventh largest economy in the world, entering Italian market can give Chinese investors the access to the European market. Italian position is strategic; it is in the center of the Mediterranean Sea, this is seen by Chinese government as the ideal point of arrival of China’s 21st Century Maritime Silk Road. Through Italian ports Chinese goods can reach northern, central and eastern Europe. To implement the Maritime Silk Road in 2014 was founded the North Adriatic Port Association (NAPA), an alliance of five ports: Venice, Trieste, Ravenna in Italy, Koper in Slovenia and Rijeka in Croatia, whose aim is to attract Chinese cargo ships reaching Europe via the Suez Canal. Because the strategic position of its ports the Association is an alternative to the
12 Chinese Investment in Europe A Country-Level Approach. Edited by: John Seaman, Mikko Huotari,
Miguel Otero-Iglesias December 2017 All rights reserved © French Institute of International
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European ports.13 The second reason for investing in Italy is strategic asset seeking, as to say acquiring technology, know-how and brands. Italy has a long tradition in sectors like machinery, electronics, food, fashion and lifestyle, and its experience and prestige are what Chinese companies lack and want to get. Italian economic network is made mainly of SMEs, who produce high-quality products, giving rise to the ‘Made in Italy’ effect, an increasing demand for products considered superior in quality and representing a status symbol. Pirelli is the most famous acquisition and the most expensive made by China, but this is not the only one,in fact, there are a lot of companies in every kind of sector bought by Beijing. For example, we can find the ‘Gruppo Ferretti’ who produces luxury yatches, ‘Krizia’, ‘Miss Sixty’ or ‘Cerruti’ for the fashion, ‘Fiorucci’ for the food. The list can continue with thousands of companies in different sectors with different dimensions. The common point of all these Italian companies is a solid brand, a well-developed know-how, an advanced technology, what they lack is money, and what China does is to put money to relaunch these companies.
Characteristics of outward FDI
China’s outward FDI are different from any other country’s FDI for one specific reason: most of these investments are done by state-owned enterprises (SOEs), it means that is the central government that directly controls the business. According to the data published by the State-owned Assets Supervision and Administration Commission (SASAC)14, at the end of 2011 China’s SOEs accounted for the 66% of China’s non-financial FDI outflows. Of course, there are also non-SOEs investing abroad, they invest in the bigger
13 http://www.portsofnapa.com/
14 State-owned Assets Supervision and Administration Commission of the State Council,
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enterprises, but analyzing the board of directors in the ORBIS database,15 it is possible to verify that the top executives of these non-SOEs are linked to China’s Government, being them members of the Chinese Communist Party. They are called Politically Exposed Person (PEP), their names are in the LexisNexis list, and this is not seen as a positive aspect, the position they hold can give rise to potential corruption and bribery. It is a good thing, when studying a Chinese company investing abroad, to analyze the board of directors and its shareholders. It will be easy to find that members of the board of directors and shareholder are in the PEP’s list if people, and if companies, banks or financial funds they will be in the LexisNexis database. why there is this situation? The reason is easy, in fact, even if China entered in the global economy, actively participating to the free trade, most of companies are not private, they are SOEs, directly controlled by the government; and when companies are private there is the indirect control of the government via its funds, bank institutes and financial companies. The decision to invest in one sector instead of another is made by the Central Government in every case.
The second reason that makes China’s outward FDI different from any other country’s FDI is that investors are not free to decide in which sector invest. It is not a case that Chinese foreign direct investments are gathered in key sectors, the reason is that there is a set of investment guidelines16 formulated by four regulators: The National Development and Reform Commission (NDRC), Ministry of Commerce (MOFCOM), People’s Bank of China and Ministry of Foreign Affairs (PRC Regulators). These guidelines are detailed and give a list of which investments are encouraged. The Guidelines were released on August 2017, with the aim to provide a classification of
15 ORBIS database
16
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overseas investments divided into three categories: encouraged investments,
restricted investments and prohibited investments. China felt the need to publish
the Guidelines because in 2016 there was an increase of outward investment, defined “irrational outbound investments”; with this document they hope to limit them, and concentrate the FDI in the right sectors. Once again, when the Government is not directly controlling Foreign Direct Investments through its enterprises, there is the indirect control deciding where Chinese company should invest and should not. Limit irrational outbound investments is not the only reason beside the choice to release these guidelines; in fact, China knows that global and domestic economies are quickly changing, this can be positive because of the growing opportunities for China’s investors to invest abroad, but also negative because investors may face several risks and challenges. For this, China gave some advices, as to say: 1.be more careful in investments, make an adequate evaluation of risks, analysis and decision-making, for avoid difficulties and capital loss; 2.find benefits to China, outward FDI have to be consistent with Chinese economy, they have to contribute to its development, not only to investor’s benefits; 3.find benefits to host nation, this means that when investing in a nation they have to pay attention to the destination’s environmental protections, energy consumptions, safety and other standards. This point is very important because in the past Chinese investments gave rise to disputes linked to low quality standards, low attention to environmental protection and safety measures, resulting in economic losses and China’s image damaged. Chinese Government is worried of what Chinese investors are doing abroad and of risks they can face. If on one side it can be positive, because it seems that companies investing abroad will never be alone, have the support of the State, on the other side this is not so positive. It means that Chinese Government is everywhere and exercises its control at every level. The second point is very interesting, is very Chinese-specific. Chinese
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government is the only that says that outward investments should be in line with Chinese internal politics and economy, none of the western governments will never say that its investors should also think to the country development. The presence, and sometimes the interference, of the Chinese Government is at every level.
Up to this moment the focus has been put on the reasons beside the choice to release the Guidelines, but what do these Guidelines say? Analyzing the Guidelines in detail which are the elements that make investments encouraged, restricted or prohibited?
Chinese companies are encouraged to engage in:
- Belt and Road investments and related infrastructure;
- investments that contribute to China’s development, by obtaining natural resources or strengthening its technological base,
- establish abroad R&D centers, resource exploration and development done in a prudent way;
- investments in agriculture, forestry, animal husbandry and fishery are encouraged, with the aim to carry mutual beneficial for both countries; - investments in commercial, cultural, logistical and other service sectors
should be done in an orderly manner;
- Establishing branches and service networks abroad for qualifying financial institutions.
Which investments are restricted? Restricted investments are those not aligned with China’s national development, macroeconomic, international cooperation and foreign policies. As to say:
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- Investments in real estate, hotels, film studios, entertainment, sport clubs etc;
- Investments using outdated production equipment that does not meet the technical requirement of the destination country;
- Investments that do not meet the environmental protection, energy consumption and safety standards of the destination country;
- Equity investment funds or investment platforms outside China without specific industrial projects;
- Investments in sensitive countries/regions with no diplomatic relations with China or that are in a state of war or chaos;
- Investments that are restricted by bilateral and multilateral treaties between China and the relevant country/region
In the group of prohibited investments, we find:
- Investments involving exporting core military industrial technology and products without the approval of the Chinese government;
- Investments in gambling and lewd industries;
- Investments prohibited by international treaties to which China is party;
- investments that endanger or may endanger China’s national interests and national security.
Belt and Road Initiative is the first point of the Guidelines, this project, whose aim is to connect China with the rest of the world following the ancient routes, is strictly encouraged by the Government. President Xi Jinping pays much attention to this project. At the second point we find China’s development
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beside the choice to invest abroad. it seems like China is worried to stay behind the western developed countries and to not fill the technological and economic development gap. Prudency and orderly manner are the key words of these Guidelines. It seems like China wants to say that even if accepted investments, investors working abroad should take care of the dimension of such investments. China is doing everything to avoid irrational investments like those made in the past. Following in the Guidelines, analyzing the restricted investments, the first point is about the possibility to invest in real estate, film studio entertainment and sport clubs, and this specification is curious especially if thinking at the Italian situation. There are two sport clubs bought by Chinese investors and are two of the most important football club in Italy and in the world. Going on in the analysis, the other points are all about technologic, technical and economic development and environment protection. Chinese attention in advanced technology is high, and Guidelines confirm it. Special attention is given to countries which China has no relation with, as to say, investments in these countries are just restricted not forbidden. Moving on the forbidden investments there are investments that promote gambling, investments in the military industry and what forbidden by international treaties to whom China took part. These Guidelines are very detailed, it seems like China does not want to let Chinese investors invest abroad. It can be seen like an instrument to make just positive investments and avoid risks.
Policy measures
If looking at the Guidelines people can think that Chinese outward foreign direct investments are limited by the central government, going on in the analysis it is evident the opposite situation. In fact, the document, after defined what is intended with encouraged, restricted and forbidden investments,
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provides a list of specific promotional measures based on the type of investments. The major instrument used to encourage FDI are:
- more favorable and convenient tax, financial and fiscal support; - priority access to loans and to foreign exchanges;
- priority regarding overseas financing, investment consulting, risk assessment, risk control, and investment insurance;
- protection of overseas investments to prevent non-genuine investments;
- establishment of an overseas capital regime for State-Owned Enterprises.
According to this list it is evident the desire of the Chinese Government to support and promote outward foreign direct investments. The only limitation the Chinese Government puts to foreign investments is just to protect investors from risky investments. To implement these measures and to protect China’s outward investors, China has signed 130 Bilateral Investments Treaties17. These treaties were originally intended for inward FDI, they have evolved over time reflecting the political and economic changes that affected China, becoming an outward investor.
New administrative measures
Approve outward FDI is very complex and slow. The need of Chinese Government to provide a list of new measures to promote outward foreign direct investments has born because of the previous limitations. The imposition of government regulations to limit capital outflows generated a fall
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in foreign buying in 2017. According to the diplomat18, Ministry of Commerce said that outward FDI by Chinese companies fell about 40% year to date in October compared to the previous year. However, despite the regulations, Chinese companies hold about 11% of all FDI assets globally. For the length of the process China has been criticized. To solve this problem, on 1 March 2018 new Administrative Measures for Overseas Investments by Enterprises (the measures) by Chinese National Development and Reform Commission (NDRC) came into effect19. The aim of these measures is to improve the competitiveness of Chinese outbound investments through the simplification of approval procedures: the elimination or pre-requirements before starting effective work on the transaction, the limitation of the governments processing time and the extension of the validity of the approval notice to two years if no changes occur are some of the new measures. It is important to say that these measures are valid for non-sensitive industries. NDRC has the possibility to decide which industries are sensitive, and to modify the sensitive industries list periodically as it wants. In the sensitive industries list there are activities like cross-border water resources utilization, news and media operation and every industry defined sensitive according to national policies. The decision tree below helps in understand the new procedures and the processing time in approving new investments. If a company desires to invest in sensitive industries must apply for approval. The processing time will take around 20-160 working days, during which the NDRC evaluates the request. This procedure is for investments over 300 million dollars in sensitive industries. When the deal is over 300 million dollars but not in sensitive industries the only requirement is to fill a form online, the NDRC will respond in a few days.
18 https://thediplomat.com/2017/12/how-chinese-fdi-will-transform-the-global-economy/ 19
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For smaller transaction, as to say, those under 300 million dollars there is no action required by the NDRC. The picture below is useful to understand the new procedures introduced on March 2018.
An increase in China’s FDI is possible with these new measures that encourage investments and simplify bureaucracy, and more than that, Chinese companies will put more attention on cost-benefits analysis for new overseas investments. The new attention in investments will give raise to an increase in investments considered positive and important to make China great, such as those connected to the Belt and Road Initiative, and in advanced technology.
Figure 1: source https://home.kpmg.com/xx/en/home/insights/2018/02/chinese-outbound-investment-regulations-16-february-2018.html
Perception of China’s investments in host countries
What are perceptions? Perceptions are what public opinion thinks and feel about a certain topic. Talking about public opinion’s feelings about
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China’s outward FDI, these are characterized by a general rising skepticism. Why? The first reason is the speed of China’s investments: in fact, China has begun to invest relatively late respect other countries, and to fill the gap invested very fast and in different countries at the same time. The sectors in which China major invested are high-tech, robotics, automotive in Europe and America; and resource seeking investments, especially in Africa, that gave rise to ethical questions. These sectors are all sensitive sectors, that could give rise to security issues. Furthermore, we do not have to forget that most of these investments are made by SOEs, and host countries perceive unfair competition; they fear to do not get enough benefits from such projects; the image of China in the host countries is not so positive, because members of the Chinese Communist Party are in leading positions in these MNEs. Another aspect that gives rise to question is that China’s FDI are in sensitive industries and infrastructures, and China’s presence can compromise national security.20 In general everywhere there is a lot of attention in Chinese investments, even if small. A special attention is given to M&A because it may lead to lay-offs, the closing down of production lines and the transfer of R&D capacities to the parent firms; but at the same time can save firms that otherwise may be failing.
Perceptions play an incredible role in international politics. What public opinion thinks and feels can influence economy and politic strategy. Having China a growing importance worldwide, a public-opinion polling is very useful for Chinese politicians to understand how their country is considered abroad. The aim of opinion polls is exactly to translate into quantifiable data
20 Cosima Cassel, Giuseppe de Candia and Antonella Liberatore, ‘Building African Infrastructure with
Chinese Money’, Paper (2010), available at http://www.barcelonagse.eu/tmp/pdf/ITFD10Africa.pdf; Xiaofang Shen, Private Chinese Investment in Africa: Myths and Realities (Washington: World Bank, 2013), mimeo; and Transparency matters: disclosure of payments to governments by Chinese extractive companies, Global Witness (January 2013), available at
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popular sentiments. In 2017 Pew Research Center21 surveyed 38 countries asking for their perception of China, if positive or negative. The results were quite surprisingly, varying in a significant way within Asia. In fact, we pass from the favorable attitude of Russia toward China (70%) to the negative view of China held by Japan (13%).
Which are the reasons for these sentiments? For answer this question we should go back in the past and analyze the historical relationship between China and the rest of the world.
Asia
Traditionally China had a positive view of Russia, the Sino-Russian relations were very important in the past, and they still play a significant role in the present, this is the reason for positive sentiments in Russian people. furthermore, we should consider the economic aspect, in 2016 China was Russia’s largest trade partner, with Russia importing 38 USD billion in Chinese goods, and the two countries have mutually beneficial energy security needs. For what concerns Japan the situation is not so easy: in fact, the two countries have strict economic relations, but the view of China by Japanese is not positive at all. We can say that China and Japan are the best economic partners but the worst neighbors. The main reasons for Japan’s negative views toward China are linked to trade: China’s restrictions on the export of rare materials to Japan, to territorial disputes over the Diaoyu Islands, and historical rivalry that has ancient origins. Pew data show a general decline in Japanese favorability toward China beginning from 2007, territorial dispute is the main source of unfavorable view.
America
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What about American view on China’s economic power, Pew survey reveals that Americans changed their view. In fact, in 2017 the percentage of American with an unfavorable view was 47%, while in 2014 was 55%. Well, the perception is still not so good, with one American out two thinking that Chinese presence in American economy is not a positive thing, but perception is becoming more positive. This means that China’s economic power is not considered as a source of concern like the past. Which is the reason for this change? The reason is the perception of the U.S. economy, in 2017 nearly 60% of Americans thought that the country’s economic situation was good, while in 2016 were just 44%22. It means that a better perception of internal economy let people more willing to accept foreign investments, in this case Chinese ones.
Africa
With African countries China has not such a strict historic relation, but China’s outward FDI in Africa let African countries have a positive view. At the end of 2016, according to Chinese government statistics, China’s FDI in Africa reached USD 2.39 billion23, the money invested from China in the last decade is more than any other country. There is a strong correlation between the investments and the perception: in fact, Chinese investments are perceived as a possibility for development and job opportunities, this makes African countries’ view so positive, for example in Nigeria 72% of people held a positive view of China in 2017. However, Chinese investments in Africa are not always seen as positive, this is the case of Egypt and Algeria, countries
22
http://www.pewglobal.org/2017/04/04/americans-views-of-china-improve-as-economic-concerns-ease/
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that, even if China had invested considerably, feel anxiety about China’s growing.
Europe
For what concerns Europe the situation is much more complex. In Europe, Chinese investments are seen as an opportunity to growth. Many countries have signed bilateral agreement to promote relations. China’s outward FDI are perceived as a source to create and/or maintain jobs, capitals are used for research, development and innovation. On the other side there are concerns linked to China’s investments; the main questions rise about the role of Chinese government and its interference in world economy, the unfair competition and the Chinese interest in sensitive technologies that could create security uncertainty. On 28 May 2018 the Committee on International Trade released a document about the trade and investment relations between EU and China24; the document shows that EU and China have a very close economic relationship, being EU «China's largest trading partner and China the EU's second biggest trading partner in trade in goods», but also shows that EU has a trade deficit with China amounting to €176 billion in 2017. The reason for this trade deficit is the level of openness, as to say, Chinese companies can invest in the EU market with no restrictions, but EU companies do not find the same openness in the Chinese market. To balance the trade deficit the EU asks China to speed up the process to reach the same level of openness in China’s market. Negotiations on this topic started in 2013; the most recent one took place from 22 to 24 May 2018, «The issues under negotiation include investment market access and protection; a regulatory framework for investment, including transparency, licensing and authorization procedures;
24http://www.europarl.europa.eu/RegData/etudes/STUD/2018/570493/EXPO_STU(2018)570493_EN
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sustainable development and dispute settlement.»25, an agreement on such themes will bring new opportunities for both sides, opening the market and allowing the free trade. Trade policy is the main topic of all this document, being China the world’s larger exporter, but relatively closed to imports. The imbalance between exports and imports gives rise to problems like overcapacity. EU expresses its worries on this issue, because affects several sectors, especially in the heavy industries. The origin of this problem has to be found «in the state support to state owned enterprises and in some trade-distorting practices26», resulting in an increase of protectionism. This is the EU’s point of view, intended as the institution, that looks at China with anxiety, but at the same time tends to strengthen the link between the two super economies, creating a big interconnected market.
A great role in influencing public opinion is made by media, in fact, when China invests in some host country, medias tend to put a greater attention on such business than on every other. There is the tendency by newspaper to represent a more critical aspect. In the developed countries such as the United States, France, and the UK questions arise around national security, while in natural resource-rich countries media put attention on Chinese FDI in resource sectors. Nevertheless, in both cases there is a common feeling: the fear. In fact, the fear is that, when critical resources or sensitive sectors are controlled from abroad, the benefits associated with such projects can suffer of inequity distribution between foreign investors and host countries. In France, the growing presence of Chinese investments let newspapers said that «China’s cooperation dialogue usually hides the will of power and fast profit»27, in other
25IBIDEM pag 13
26 IBIDEM pag 36
27 Philippe Delalande, Les investissements chinois en France: les craindre ou les souhaiter, Le Monde
(15 October 2012), available at http://www.lemonde.fr/idees/article/2012/10/15/les-investissements-chi nois-en-france-les-craindre-ou-les-souhaiter_1775602_3232.html.
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words, it means that China’s desire is to get as much as possible in the shortest possible time. Of course, media do not focus only on negative aspects, but also on positive ones, seeing China’s outward FDI as an opportunity more than a disadvantage. But how is the perceived China by public opinion? What people think about Chinese presence in a country’s economy? is this a source of worries or a chance to develop the economy? This question was asked by Swg-Corriere in 201628, asking to Italian public opinion about Chinese growing presence in the Italian economy. Historically, Chinese presence in Italy began in the 80s, especially in sectors like catering and leather manufacturing. In recent years Chinese investments changed and now the sectors interested the most are energy, banks and infrastructure; however, this kind of investments are not perceived as dangerous for Italian economy as other investments are, like for example food, fashion and football, sectors that represent the traditional “Made in Italy”. Results are not so such surprising, in fact, more than half of people surveyed are worried about Chinese investments, and just about 30% think that these are a stimulus for the economy. Italian public opinion has the same feelings of other European countries, fear is the dominant feeling, caused by prejudice, because the situation of Chinese investments is not so clear. People are worried about working conditions, quality of Chinese products, loss or change of traditional products; these feelings are increased from the economic crisis on. On the other side, the other part of population thinks that Chinese investments are an opportunity for Italian economy, they can stimulate it in becoming more competitive on the global market. Why such a different vision of investments? The survey gives us more information about the subjects interviewed; it shows that millennials, people with a high degree of study and well-integrated into the job’s world
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are more favorable to the access of Chinese investments into Italian economy than people in a disadvantaged condition or with a conservative view. The north east of Italy is more conservative than the rest, it is worried to lose capacity in the economic, decisional or cultural field.
The position of the governments
The position of the governments towards China’s FDI is generally positive, they maintain a welcoming attitude. Governments from all parts of the world have supported missions to China to attract investments. Japanese government explicitly promoted inward FDI29, specific programs have been established in 2014 to attract it. This program aims to reform and revitalize the Japanese economy, that faces problems like a low growth, an aging population and a shrinking workforce. The intention of the Japanese government is to reach $314 billion of Japan’s inward FDI by 2020, the double respect 2014. Looking more in detail the set of reforms established to attract investors in Japan, we can see there is a simplification of regulation and the translation of Japanese law into English. Other countries, like the UK, do not have specific programs that govern inward FDI30, but there is the intention to create one to let the UK becoming even more attractive for FDI. In Europe, China’s FDI were warmly welcomed especially in countries affected by the Euro crisis, and others, like Spain and Ireland introduced regulations to facilitate China’s FDI31. Of course, China’s outward FDI are not welcomed everywhere, there are governments that have some concerns, mainly related to national security, to the Chinese government interference in the host country through the SOEs,
29 Measures adopted by the Japanese Government to attract foreign direct investments
https://www.export.gov/article?id=Japan-openness-to-foreign-investment
30 The UK Government regulations introduced to make the UK more attractive to foreign investors
https://thelawreviews.co.uk/edition/the-foreign-investment-regulation-review-edition-5/1149295/united-kingdom
31 Spanish Governments measures to attract foreign direct investments Ley 14/ 2013
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or to environmental protection in countries where China’s interest is for national resources. This is the case of Germany, that first warmly welcomed Chinese investments, while later beginning to worry about the nature of those investments32. This change is due to the growing questions about the nature of Chinese investments. In fact, the sectors the most interested by Chinese foreign direct investments is the technology one. Germany is directly interested by Chinese investments in technology sector, is very attractive. In 2016, for example, the German robotic maker Kuka has been acquired by the Chinese firm Midea. It is not a case that Germany is worried about China.
Chinese influence on the global economy
China for a long time has been considered the world’s factory, the land to be conquered, but now things are changing, and it seeks to become the biggest shopping mall ever. Brian Coulton, chief economist for Fitch Ratings, said that «China is becoming more of an influence on the world economy as the country becomes a major trading partner for many nations and a growing source of foreign direct investment»33. Fitch Ratings is one of the most important American credit rating agencies; they saw that China is dominant in global commodity imports, and a growth in imports means an improvement in global economy. Because of the new regulations in 2017 for outward FDI, Chinese investments have slowed, but a new acceleration is forecasted for 2018. What does it mean? How China can transform the global economy? According to what said by Courtney Rickert McCaffrey, Manager at A.T. Kearney’s think tank, the Global Business Policy Council34, there are three
32 German perception about chinese investments
https://www.scmp.com/comment/insight-opinion/article/2131334/europes-security-concerns-over-chinese-investments-need-be
33http://www.chinadaily.com.cn/world/2017-09/13/content_31941531.htm
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different ways in which China’s new FDI patterns can influence the global economy.
The first is by reshaping the global value chain: the clearest example is the Belt and Road Initiative (BRI), which aims to construct a variety of transport links throughout Asia, the Middle East, Europe, and Africa. There is a heavy investment of Chinese firms in infrastructures in countries along these routes. Together with the BRI, Chinese firms are investing in natural resource assets, a sector from which many Western companies shy away. BRI infrastructure building and natural resource seeking are two of the encouraged FDI defined in the regulations.
Going on in Courtney Rickert McCaffrey’s analysis, the second way in which Chinese FDI could transform the global economy is by elevating the relative size, power, and competitiveness of China-based companies. In other words, Chinese companies investing abroad, exposed to foreign markets, have the possibility to improve their efficiency and be more innovative. In this way there is an increasing in sources of competition and transfer of knowledge and technology. Technology transfer is one of the key goals for outward FDI, and investments in high-tech and advanced manufacturing sectors are on the list of encouraged FDI.
There are also geopolitical tensions around strategic sectors that can affect the global economy, and this is considered the third way in which China’s outward FDI can affect the global economy. The sectors strongly encouraged from Beijing are high-tech, critical infrastructure, and natural resources, sectors that let many governments around the world be wary of the influx of Chinese investment. In Europe and in the United States have been felt the need to create a more stringent investment screening program for such strategic sectors. Even if not frankly said, the reason for these actions is China’s
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foreign investment spree, because it could give raise to geopolitical tensions among the three largest economies in the world.
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2. China’s outward Foreign Direct Investments in Italy
2.1. Introduction
Chinese attention in the sector of energy produced from renewable sources comes from far, it is a very big project that involves all the world. First, we must consider the growing attention of China to climate change. On March 2016 began the 13th Five-Year Plan (第十三个中国五年计划), “green economy” is one of the main themes35 for the period 2016-2020. The goal of the plan is a reduction of carbon emissions, and water and energy consumptions. Middle term goals can be defined in increase energy production from renewables and promote the development of sustainable and reduced environmental impact infrastructures. On October 2017 the National Development and Reform Commission released a paper with the title: “China’s Policies and Actions for Addressing Climate Change”36, in this paper are exposed the measures taken by China for contrast the climate change, and at the same moment was formulated and implemented the Work Plan for controlling Greenhouse Gas emissions. The key words of the paper are green economy, circular economy, low-carbon energy system and low-carbon energy lifestyle. From the perspective of China there has been a great promotion of low-carbon developments, and this fact is supported by data, in fact, in 2016 there has been a reduction to carbon intensity of 6,6% respect 2015. The decision to promote a green, low-carbon, circular economy was taken during the 19th National Congress of Communist Party of China, with the aim to contrast the global climate change. Concrete actions have been taken to mitigate the climate change, as the promotion of green low-carbon industries as pillar industries,
35 中华人民共和国国民经济和社会发展第十三个五年规划纲要 , 13th five-year plan,
March 2016 http://www.gov.cn/xinwen/2016-03/17/content_5054992.htm
36http://www.ndrc.gov.cn/
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the reduction of energy-intensive industries; in other words, the State Council aims to stop approving new coal projects, to eliminate backward production capacity in steel and coal industries. Reducing the coal as a source of energy raised the need to search for new sources of energy, the choice dropped to non-fossil fuels: water, sun, wind and nuclear energy. In 2016 the sum of non-non-fossil power counted for about 30% of national total power generation.
What just said is about internal policy, what about foreign policy? The Chinese positive attitude and the desire of cooperation is what moves China. On one side there is the cooperation with developed countries to find a solution to climate changes: Chinese Government asks for equity, common but differentiated responsibilities. According to the paper China is actively participating in international negotiations, gave a great contribution to the conclusion and the rapid entry into force of the Paris Agreement, and the international community recognized his efforts. The Paris Agreement is not the only project carried on, China participated to other multilateral processes such as the G20, the APEC and the BRICS, whose discussion topic was also the climate change.
Producing energy from renewable sources is not an idea born in recent years. There was a great project to produce energy from photovoltaic systems in the Sahara Desert for the European market. This is not a Chinese idea, but an European one, developed by Trans-Mediterranean Renewable Energy Cooperation (TREC), an organization founded in 2003 by European, Middle East and North African (EUMENA) scientists and experts with the aim to create a system for the production of energy from renewable sources, reducing the emissions of CO2 in the EUMENA area, and giving energy to the desalination systems working in the MENA area. This project, so ambitious, big and that could give rise to a grid of shared knowledge and cooperation,
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faced several problems: geopolitical problems linked to the area in which the photovoltaic system should be installed, the Sahara Desert, between Morocco and Algeria, countries with problems each other; economic problems due to the high costs in installing the system, technological problems because the high distance between the point of production and the point of arrival. At the end, the project, even if not totally abandoned has been interrupted. And it is now that entered a Chinese company, the State Grid Corporation of China, the biggest in the world for the energy production. The idea at the basis is the same, produce energy, not just for Europe, as in the original project, but for all the world, and within 2050 they want to produce the 90% of energy with renewable sources. A project much more ambitious than the original one. The amount of investments is estimated in 30 thousand billion of dollars, in 30 years. The problems faced by the original project are also in this one, but initial investments have been done, and with the fast development of technology it is safe to say that in a not so far future, China will be able to realize the project.
2.2. Dimension of investments in renewable sources
Now that is clear the attention of China for the environment and the growing importance given to energy from renewable sources, a question arises: what is China concretely doing in producing energy for renewable sources? How consistent are the investments? For answer to these questions we can refer to the data released by Bloomberg on January 201837. According to the report, in 2017 the total amount of investments in energy from renewable sources reached the sum of 333,5 billion $ globally. Most of investments has been done by China, that alone invested 132,6 billion $, more than the double of the money invested by the US, only 56,9 billion $. In Europe
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