Chinese companies earn billions in contracts financed by European taxpayers

Chinese state-backed companies have dramatically increased their presence in Europe’s rich public procurement market over the past year, according to Wall Street Journal analysis which, for the first time, quantifies how Beijing has expanded its global push to compete with Western industrial giants in one of the world’s most sophisticated economies.

The European Union’s public procurement market is one of the largest in the world, valued by EU officials at around € 2 trillion, equivalent to $ 2.44 billion per year . The bloc invites companies from around the world to bid for the construction of its roads, bridges, rail networks and power grids. EU policymakers say competition keeps costs low and European entrepreneurs are globally competitive.

This year, Chinese companies have landed tenders valued at nearly 2 billion euros, more than double their earnings over the previous year, according to public data.

European companies say they are priced on their own land by conglomerates owned or subsidized by Beijing, which Europeans in many cases accuse of predatory pricing with offers up to 30% lower than competing offers. Some political leaders fear the imbalance will worsen after the coronavirus crisis, as cash-strapped governments borrow heavily to rebuild.

“Indeed, European taxpayers pay the Chinese government to build their infrastructure, which weakens European taxpayer companies,” said Alicia Garcia-Herrero, chief economist for Asia-Pacific at French bank Natixis. “It’s worrying.”

Source link

Comments are closed.