 Y cwm roedd gen i ddylkom ni oedd y gallun ymddangosion yw mewn â'r cwmwysgau ar gyfer nhw wahanol yw'r cwmwysgweithins a'r gyfreith ar y dw i'r unigol. Mynd yn siaradat yn cynfodol sy'r cyfwysu'ch cyffmysgau ar hyn, rydych yn ei gael i gael â'r cyfry. Y cyfwysgwysgwysgwysgwys yn ei gymryd yn amlallu'r cyrraedd, boeddwch i'r cyrraedd o hyn yn cyfrifiadau eich cyfwysu euch chi y摩 a'r llwyth i'n gwych. Mae'n gweithio'r llwyddo i'r rhaglen a bod hynny'n gweithio'n ddweud. Rydyn ni'n ddweud, sy'n gweithio'n ddweud y dyfodol ar� yn ddych chi'n cymdeithasol ac rydyn ni'n ddechrau. Felly y cymdeithasol yw'r cyffredin wedi'i gweithio'r twyr eich llwyddi a'r llywddi ar yr adnod, wedi cael ei gennymau. Felly, ydych chi'n mynd i'n gweithio gweithio ar y byddai hwn o ddim yn ystod, ond yna maen nhw'n fwy bod ymweithio'n gwneud y cwysigol a ysgriff. Rydyn ni'n edrych i'w ddweud y maen nhw'n gwybod, ac ar draws wnaeth 2009 llawer o'r ffordd ers FDI, yn ymdillau, i'r ffordd, i'r wnaeth o'r bwysigol, i'r ffordd, i'r bwysigol i'r bwysigol, am yr Unedig Yng ngyngdyn, yn ddod yn ymdilladwch yng Nghymru, yng Nghymru'r Gwneud yng nghymru. Yn 2010, yna bod yna'r ystod, mae hynny'n hynny'n gweithio yng Nghymru Europeth, o'r cymryd yng nghymru a'r cymryd mae'n gweithio'n gweithio'n gweithio'n gweithio. 2010, os gallwch chi'n gwneud, Chynedd wedi'u gweithio 45 bilyn ymweld o'r gweithio'n gweithio. Mae'r gweithio'n gweithio'n gweithio. Yn Chynedd ymweld yng nghymru yng nghymru yng Nghymru, mae'n gweithio'n gweithio'n gweithio'n gweithio yng Nghymru ac yn ni'r rhaid i bod y cyfle ffordd â'r fyndaeth yn cynhomyr llysod. Dyma yw'n bweron heddiw hwnnw'n gobeithio ar gyfer y cyflydd. Yr hynny'n cedlaeth y Lleidegwyr, y Lleidegwyr bobl, y Lleidegwyr ar gyfer'r rhai Llywodraeth, ond ond yn cyffer yn ei weld llywodraeth y Lleidegwyr llywodraeth, y Lleidegwyr yn ei weld yr ystyried ddylau'r unedig oes y rhan o'r cwmpitanc yw'r polisi neu sy'n ei dda i'r cwmpitanc o'r polisi ar gyfer cyffrifolysol. Mae'r cwmpitanc sy'n yw'r polisi, sy'n arddangos o'r cwmpitanc sy'n ymïdd ar y cwmpitanc a'r Cymysgol, ar gyfer y Tretiaeth Ryf yn allan. Mae'r cwmpitanc yw'r unedig o'r unedig o'r unedig o'r unedig o'r Cwmpitanc yw yn ymgyrch, ac mae'r gweld yn fwy o'r bwysig o'r cyfnod y Chino Mae'r Un i'r Un i'r Un i'r Llywodraethol i'r cyfrinddau a'r lliw i'r ffordd o'r cyfrinddau Llywodraeth, oherwydd i'r Llywodraeth dda'u cyfrinddau Pre-Lizbon, efallai yn y Llywodraeth Un i'r Un i'r Llywodraeth. Yn gyfrinddau'r cyfrinddau'n gweithio eich lliwyddiadol, a'r lliwyddiadol oherwydd oedd rydyn ni'n ei ffordd o'r lliwyddiadol …fobodol yw un hyfforddiad wedi cael ei roi'r perffredin ychydig iawn. A dydydd y gallu hyfforddiad arill yn rhain y bach iawn o'r syniad. Dyma'n ddilyg ond ond a'r gallwn werthoedd a'r dyfodd ddrangau ūau… …adew i'r union bach iawn yn ddentangos ddefnyddio'i gweithio'i chynny. Mae gweithio'n ddillid yn bwysau'r un yn rhani'u gweithio'i gweithio. Rydym yn ddod y gallwn gwaith yn gyrsunodd... Y cyfosiwn, wrth y pwylleau ddylen, chynnydd Miles yn erioed y raen o argeddall ac ei chafodd angen i'r unionol Europea. Yn gyfrifio'r cyfechfflwn ar hyn i chefnol iaith, yn ei cyfrifio'r cyfrifio. Mae'r cyfrifio sy'n cyfrifio gan y cyrcofaniaeth ymlaen, ac mae ein cyfrifio mewn bodig paedigol, roedd yn cynnigau eu unionol Europea. Roedd yn naith ylwyddoedd yn y cyfrifio yllwanol. Y cimbwys pethau wedyn gweld ei sgwylio ydy'r gweithio a'r llefydd o'i Chynwys. Pan fyddwn i'n meddwl sydd yn rhoi meddwl unig oedd mae'r cychwyn ffumliau sydd ar y qomwaith i ddegwyd ac i'n meddwl am y cinc oedd. Ac mae'r cychwyn o'r cychwyn o'r cychwyn o'r cychwyn o'i cychwyn o'r cychwyn o therwyr. recognized and point and very important point. When foreign investors invest in a market this is not very familiar with, there are fixed costs of doing business. The larger market the more likely those costs can be spread and therefore it means to say that a larger market is more attractive, because once you have paid those fixed costs and you know how to operate in that market you have got a large market that you have got activity in. We'll return to this on the policy front. Chinese firms tend to have a lot of acquisition activity, mergers and acquisition data show that the mergers and acquisitions take place in the same countries that most of the foreign direct investment takes place in, and what Chinese firms are looking for with mergers and acquisitions, really mainly acquisitions of course. We just saddled with the term M&As as a legacy, is the size of the economy and the degree of liberalization, so if it's easy to take over enterprises, then Chinese foreign direct investment will very often go down the route of acquisition. The opportunity to acquire strategic assets is very important for Chinese firms, in particular acquiring networks of multinational firms, so not just acquiring a business in a member state of the European Union, but actually acquiring a network of that multinational enterprise, not only within the European Union, but also internationally, immediately internationalizes the Chinese firm and gives it a far greater degree of diversification than it could have obtained on its own. Also of course getting technology, acquiring technology through acquisition and brands, very important. Now the investment promotion agencies in the member states perform a very important facilitation function for inward foreign direct investment. They reduce information and transaction costs of Chinese investors and the fact that they do this shows that in a sense we think of it as being the cost of entering a market. Now if you can neutralize those costs of entering the market or bring them down, it makes foreign investment more likely. We've also seen a tendency for the proliferation of investment promotion agencies. Each country, each member state in the European Union has at least one investment promotion agency. I say at least one, some have several, some have them by region. This proliferation of region and even city level investment promotion agencies testifies to how important this reduction of the barriers is perceived to be and the degree of commitment of financial resources to try to encourage inward investment in particular from China. An integrated FDI policy at the European Union level we think encompassing international investment agreement with China would be a big step forward. A significant amount of Chinese difficulty in entering the European market is this cost of foreignness, the fact that they don't know how to do business. Not only in a member state they might be locating their investment in but also the rest of the European Union. The fact that there are these costs of foreignness means to say that although there's no discrimination against Chinese firms, if nothing is done to help address their concerns and the information that they need, then in fact it's a sort of discrimination by not doing anything or not doing enough. And so this is really quite important that the European Union, although it's got very little inward Chinese investment, it actually hasn't as a whole made a great effort. And our policies based on the reduction of barriers at the European level would be very helpful and they would help much more we think than encouraging investment incentives which actually are a very weak attempt to try to get inward foreign direct investment funds. But they are better to reduce the barriers to doing business and that's good for domestic industry, European industry as well as for inward Chinese investment. Now one of the things we're going to emphasise towards the end of our talk today is the quality of inward Chinese investment, not just the quantity. Looking at the numbers is okay but it doesn't tell us anything about the impact and this is very important. And what we really are going to sort of hinge our analysis on is the German benchmark model, nothing to do with the fact that Henrik is German and sitting next to me here. But he did insist I put it in, is that high value added, high labour productivity and high employment. That's what we see when we look at Chinese investment in Germany and indeed most foreign investment in Germany. And that's really in a sense a holy grail, if there's a holy grail of inward foreign direct investment. Now Chinese firms are unlikely to transfer new technology to the European Union but certainly the advanced countries. But what they are likely to transfer is entrepreneurship, an entrepreneurial business model. They do have the potential to re-energise parts of the economy that need re-energising. And so with that in mind I think it's fair to say that inward Chinese foreign direct investment is likely to be a good thing. Now a little note on how we measure, how we look at, I don't know if we moved it on, no you didn't move it on but it doesn't matter, there we are. That was the executive summary too that you had. The internationalising firm, how we think of internationalisation, how we measure it is actually quite important. The measuring foreign direct investment is very often using FDI, foreign direct investment as a capital value. Now FDI is defined as an enterprise by a foreign investment in an enterprise by a foreign resident enterprise with over 10% or over of equity based voting power. So it's basically the idea is if you have 10% or more of voting power in an affiliate firm then you can appoint on the board of directors one director. So you get one director basically. And that signifies a long lasting management interest in the company. So that's how we measure, how we indicate foreign direct investment exists. It's measured in financial terms and the problem with measuring it in capital terms is it doesn't give us really an idea of the impact. What we really need is operational data, employment, value added of course, turnover, profitability and so on. And so when we look at the impact of foreign direct investment we really need these figures and if this is a plea to the European Union it is to improve the figures, improve the data that we collect because as you will see there's quite a lot of gaps. In a sense the countries which have the poorest statistics tend to bring the European Union down because the euro stat is very much reliant on each member state to provide statistics and we haven't got the best statistics from every member state. So the motive for foreign direct investment market seeking that's very much like exports trying to grow your market so you might engage in foreign direct investment to grow your market. Strategic asset seeking I've already referred to getting technology, networks, brand names and so on. Efficiency seeking we don't expect that to be very important in the European Union because there aren't a lot of low wage cost advantages for Chinese investors. A natural resources seeking there are some evidence of that but not again very much in the European Union. Acquisition versus Greenfield foreign direct investment is the important distinction between the method of entry, the mode of entry. So acquisition means a lot of expenditure up front and obviously access to capital is very important for that but at the time the acquisition takes place a lot of money has to be put in right at the beginning. In Greenfield it can be built up over time. We would expect acquisition to be related to acquiring assets which are already there in Europe whereas Greenfield is using the strategic assets that the Chinese firm itself has and is growing slowly through its internationalisation process. So with those concepts in mind I hand over now to Henrik. I would like to start with putting Chinese investments into the European Union into context because as we had earlier Chinese firms invest 50% more in the European Union than in America in 2009. But even this figure is tiny when you compare it to Chinese investment elsewhere in the world. I'm not sure if you can see it from the background or this kind of figures and graphics coming up here. But Chinese investments in the European Union is tiny in comparison to Chinese investments in Asia, Chinese investments in Latin America. The problem with those data of course investments in Africa, Latin America and Asia is a lot of this investment is going to offshore financial centres like the Cameron Islands, British Virgin Islands, Hong Kong and we don't know really where the money is going on from there. So what we can expect though that some of the investment is going through the Cameron Islands, British Virgin Islands to the European Union and the data is presented here which is coming from the Chinese sources could be regarded as conservative. But even if you put it as conservative it is a very small amount of Chinese investments going to the European Union and that's very much if you like from a Chinese perspective. If you look from the European Union side we see that the majority of Chinese investments is concentrated in the EU 15 in the old member states. So it's not as much going to the periphery as was alluded to earlier. It's very much going to the UK, Germany, France, to those countries which also put most effort into affecting Chinese companies. But in terms of percentage of how much investment from outside the European Union is coming into the European Union is Chinese. It's less than 1% of all investment which is coming to the European Union is Chinese. So there's nothing if you like as the media is very much of putting as a Chinese are coming. The Chinese are buying out the European Union, the Chinese are conquering the European Union market is very much at this stage of an amount you could argue well we don't really have to discuss Chinese investments because there's hardly anything happening. But when you look at growth rates of Chinese investments into the European Union you see that the growth rate is larger than it is for other regions in the world. And when you then consider that all of these figures are conservative because we don't know what's happening in offshore financial centres. There's some argument for looking further into Chinese investments and seeing how this could be attracted also to see the impact of Chinese investments in European host economies. The distribution of Chinese investments within EU 27 has been very much concentrated on services. And the services we broadly mean the aspect like wholesale, distribution, transportation, logistics. So all of those activities which help Chinese businesses further exporting to the European Union and defending their market activities already have in the European Union aspects which Jeremy Clegg mentioned as market seeking activities by Chinese firms. In this category all support activities by Chinese banks and where we often see kind of domestic banks going along with local M&E's to support the internationalisation process. So these two aspects of wholesale, logistics, distribution and finance would indicate that there's a further increase of Chinese investments coming. Part because they've got better financial support by domestic banks they are familiar with. But also where we often then exporting is preceding further investments once these Chinese firms are more familiar with the local markets. The kind of level of foreigners has been reduced and they've made further contact with local businesses. And then we would potentially see shift as we see slightly happening over the years 2006-2008 of more investments in new manufacturing because Chinese firms see either that trade barriers might be erected in the European Union because of too much trade coming from China. Or because they're becoming more familiar with the Chinese European markets and therefore start investing in some European countries. And those investments in manufacturing could very likely be in those periphery countries, especially the Eastern European countries where labour is somewhat cheaper than some of the Western countries. It has been mentioned a couple of times at least in the public press that the Chinese are coming, the Chinese are buying of the European Union. And there have been articles kind of nicely marketed with shopping bags, Chinese shopping bags and Chinese buying of the whole country. I think Forbes had a nice picture on this. But when you look at the acquisitions of European firms by Chinese, as supported at least by Thomson Reuters, there have been at maximum 17 acquisitions of European firms in any one year over the last 10 years. And acquiring 17 European firms across the EU 27 can't be called a buy out of European businesses. The distribution of industries is so interesting because you've got a concentration in sectors which are labour as materials, industry fields and high technology. All of the aspects which Jeremy called earlier, asset seeking, strategic asset seeking investments. And those kind of acquisitions should help Chinese businesses to move up the value chain to become potentially more competitive within the European Union as well as back home in China where there's stronger competition from Western and Asian businesses entering the Chinese market. But also then as one of the difficultest Chinese companies face that they have to pay lots and lots of license fees say to Western businesses which have made the innovations and have the patterns. Once they start moving up value chains, they can create their own innovations, they can create the old patterns and reverse this kind of license flows which could make them internationally way more competitive. A difficult part of course is with any merchant acquisition or any acquisition is the integration of businesses and as well as picking the right acquisition target. You will be familiar with the acquisition of Thompson's TV business by TCL where they have bought kind of completely outdated brands, completely outdated technologies at a time when we moved to flat screen TVs, they have still bought the old technologies. Thinking it would work well and shortly afterwards had to close down the European businesses and operations in Poland and elsewhere because it was a huge failure. Other businesses like Lenovo have done better with the acquisition of IBM and if they were to succeed in buying HP's business as well it might be quite a big force. In terms of distribution in countries where do Chinese firms acquire European businesses, we see the same pattern again that there is a strong concentration in the UK, Germany and France. Ireland is popping up in 2010 which could be due to the economic crisis aspects and kind of opportunistic positions by Chinese businesses. But again it is not supporting the perception that there might be kind of coming in through the periphery and exploiting certain markets there. It's rather, especially the case in Germany, where Chinese businesses are acquiring smaller firms, acquiring family businesses which struggle with the succession to the children or elsewhere who are just seeking an investor who has funding and Chinese businesses where we often have funding at the hands where they can invest in this new business. And then as the evidence shows at least for the German case I find win-win situation because the Chinese partner brings in new funding. The German side has then opportunities to develop new products and is focusing on the R&D aspect. But also for the cases we know of they have been then Chinese firms which normally operate in the low-tech area but the German partner operate in the high-tech areas. Coming together then you then are able to serve the whole market from low-tech to high-tech and potentially develop jointly some kind of mid technologies as well. At the same time the German company gets better access to the Chinese market which is in those particular sectors where we often the fastest growing sector globally. So in all respects it's a win-win situation and German operations are normally not scaled down or closed down. Hs been the kind of widespread angst when the Chinese are coming just buying stocks and moving property elsewhere. A note on the ownership type of Chinese businesses. Chinese businesses there is a great dominance or still a big role played by state enterprises and enterprises are invested in buying European businesses. And they indicated here as blue as government related or government influence businesses. But likewise we see a large number of acquisitions by private enterprises. As you have a huge number of very wealthy and very rich Chinese entrepreneurs which goes against a bit of what we said earlier about the kind of China's huge extreme rapport. Some cities in China apparently have a higher ratio of rules than you have in the whole of the United Kingdom and Bentley is making great sales in China as well. So it's not can't be that poor country. And you have got entrepreneurs coming from China to open industrial parks within the European Union to further support exporting and investment by Chinese businesses. Those parks are not necessarily well run but there is indication of Chinese businesses coming to European Union for multiple purposes. Another point to be mentioned which is a finding we have from another study we do parallel to this. It seems that it's not important very much if you are a Chinese private enterprise or Chinese state or state influence business in order to internationalize. It's rather the question to what extent you have access to finance in China. And this then is a question to what extent you've got connections to the wide sources of finance. And it's very likely that you are a large private enterprise and you've got better access to finance than a state enterprise which might be small or might be struggling or might be from a province where you don't have the economic development and institutions in place that couldn't support internationalization. In a nutshell kind of this ownership question therefore and which is very often related in western countries, more so in the states I suppose, with some kind of angst against government involvement, government relationships coming in. We wouldn't see this to the same extent. And if you're concerned about subsidies, if you're concerned about unfair competition because of easy access to capital, then you would also have to look beyond state-owned enterprises and also consider private enterprises and very much look into detail how they have access to capital rather than just take it as a given because it has to be state-owned. They are the only ones with access to capital. OK, so now switching back to a study which we didn't do. It's the China Council for the Promotion of International Trade which is worked with OPMofcom. So it's a Chinese trade promotion, trade and investment promotion body. They have been doing an annual survey in recent years and which I think will find rewarding to look at. The purpose of Chinese investments according to their survey are quite revealing, but unfortunately not according to the categories of investment motivation which I outlined earlier. They've got their own. In fact you'll particularly enjoy I think the one at the bottom which is evasion of trade barriers. So it's very interesting the way in which the survey is conceptualised. The key thing to take away from this is that strategic asset seeking at least in part is reported as being 49% of the purpose. So if you add acquisition of advanced technologies and experience to acquisition of famous international brands, we can see that of the acquisitions which take place a lot of them are actually trying to get hold of this sort of important investment assets. The purpose of Chinese investments particularly in the European Union 27 is exactly the same amount in terms of strategic asset seeking. So the first was the global picture, the second the EU 27 again 49% acquisition of well-known brands and also acquiring advanced technologies and management expertise. So we can see that certainly the motive to acquire strategic assets looms very large in the mindset of Chinese firms. Having said that, the CCPIT survey is a relatively small survey of firms and bias towards perhaps these small and medium sized enterprises which tend to be its major clients. So in a sense we're looking at a sort of a small part of the Chinese Outward Investment cohort. And then, thank you Henry, if we could move on to the most, the respondents to this survey, the most promising EU sectors, manufacturing which of course covers the multitude of sins and wholesale and retail trade that is more or less to do with trade promotion. I think it's pretty clear that what we need is a lot more detailed data in order to be able to drill down. But as you can see, the other sectors do reveal themselves to be somewhat important but nowhere near as important as manufacturing and distribution. So with that I think we can say that there's plenty more that we really need to know about what's going on within the mindset of Chinese internationalising firms. And with that I'm not going to hand back over to Henry who's going to talk about the impact of Chinese firms in the European Union. Well then we're going to finish off with the impact of Chinese investment in the European Union. Not with the forecast of how much investment there's going to come, but rather to see how Chinese firms so far have impacted European Union economies. Cos that's in the end the interesting part. Cos why would you want to attract more Chinese investments if you don't know really what the impact is, how they're connecting to local businesses, how they're helping local employment. And the data we have from this is from Eurostad, and I'm afraid you really can't see this probably with the small font size in the background, but there's also not a lot of data on this because Eurostad's data collection on this is pretty poor. And as Kevin said earlier we should make policy, policy should be informed by good knowledge and data, but the data Eurostad is publishing is not good. So therefore the kind of policy making you've been commissioned to do on those data is questionable. Cos when you look for example at the United Kingdom and Eurostad is reporting that 25 Chinese businesses in the United Kingdom by 2006, while the UK tried in investments reporting some 400 businesses. So it's quite a difference in numbers these different institutions are reporting. And the same goes for other countries as well. Some of the member states do not report any data on Chinese businesses. But to be fair they're also not reporting any data on Japanese or American businesses. They are just not reporting any further detail which could give some indication of how important are these businesses. Do we want maybe just to track more South Korean businesses because they bring more employment, more investment and more knowledge to the country than Chinese businesses? And especially given in times where we see budget cuts all over European unions and you have to invest in the resources more carefully, you have to know really what the impact could be of any potential foreign investor. Jeremy alluded to the Chinese investments in Germany. Germany and UK as we said earlier are the countries in the European Union which have been most successful in affecting Chinese businesses. And these countries also have investment promotion agencies which are very targeted approach normally, trying to identify Chinese investors they would like to have in their countries to invest in, or from particular industries, and then go visit them in their headquarters in China, speak to them directly, make a nice package for them to come over to invest here, rather than having a broad brush approach that's going to trade for the essence board and speaking to everybody, but being very, very focused in terms of who they would like to have. And maybe this explains why certain indicators like turnover value added as a ratio for Chinese businesses in Germany is very similar to the kind of data we see for American businesses. And the same goes for other key indicators. Even though Chinese investments is very small in size and which is fair, not as Chinese businesses just started to internationalize in Japanese and Americans have been around for a couple of decades, for some key indicators we see that the Chinese are very productive, very beneficial to the local economies. And with the example I brought early on the acquisitions and the win-win situation of Chinese firms, it's very likely that they're also being good at fresh linkages to European economies in order for those businesses to internationalize into China. And indeed some of the investment promotion agencies we've been speaking to see these as one of the great advances of Chinese businesses coming into the European Union because this will eventually then kick off a export from the European Union into China or indeed for investments into China by European businesses because small, medium-sized enterprises then suddenly see a chance to get to know Chinese businesses, to get to know Chinese entrepreneurs and invest in the other direction. A note on the kind of technology and knowledge Jeremy Clegg, Jeremy Clegg meant that Chinese businesses bring into the European Union. A recent trend seems to be as indicated by the interviews with investment promotion agencies that more and more Chinese businesses bring in R&D centres into the European Union and with this bring high-skilled Chinese labour. Not in the kind of scale as you would have heard of probably from Africa, where you've got thousands of Chinese workers coming in and nobody else can work there. On a more kind of selective basis you have some high-skilled Chinese labourers who then work with local businesses and local employees to jointly develop new ideas and products. If you see this increasing in numbers then some of these ratios and indicators of the impact that Chinese businesses can have in local economies is going to improve further. But all of this, as we said, is on a small scale. To kind of summarise and then finalise this presentation, we have some data on Chinese investment in the European Union and the indicators indicate that the investment is increasing. The religious welcome by the European Commission as well as by the Chinese side and indeed the Chinese embassies have contacted extremely welcome that, as I put it, finally the European Commission has invested in Chinese investments because they would like to see further increasements as well of Chinese investors. But the pattern of Chinese investments is in the periphery very sketchy data as typical to get by, a problem which investment promotion agencies see as well because then therefore for them it's difficult to make any policies. But those investment promotion agencies with a very targeted and what we call a deep strategy on focused Chinese investments are the most successful in interacting Chinese investments and also an investment which has, it seems, a positive impact on the host economies and it's not just an investment which is kind of asset stripping and moving back to China in a short instance. You're not going to make any predictions on the future of Chinese investments in terms of numbers. So there's no forecast, there must be, to revise in a short future. But it seems in all likelihood that Chinese investment is going to increase with the economic development we see in China and the increasing competitiveness of Chinese businesses. And with this I would like to end the open dialogue on this further. Great. Thank you very much.