The Diplomat
More than half of the Chinese businessmen settled in Spain believe that our country offers a “favorable environment” for innovation and the vast majority of them are optimistic about the evolution of the Spanish economy compared to the rest of the EU and even believe that it will grow over the next twelve months.
This is according to the report Chinese FDI in Spain: global outlook 2023, prepared by ICEX-Invest in Spain and KPMG-Spain, the global network of audit, legal, tax and financial advisory firms, which was presented last Tuesday at ICEX headquarters in Madrid as part of the 50th anniversary of the restoration of diplomatic relations between Spain and China.
According to the report, prepared through surveys of eighty Chinese-owned companies established in Spain and interviews with eight executives of these same companies, 60% of Chinese companies consider that Spain offers “a favorable environment” for innovation due to factors such as quality of life, market size, access to other markets (especially those of the EU), infrastructure, integration of expatriates, logistics platforms and the availability of highly trained professionals.
Respondents also rate bilateral relations at an institutional level very positively and consider, in this regard, that “maintaining open and cordial institutional relations between China and Spain will boost bilateral trade and attract more Chinese investment to Spain”.
They also make very positive comments about the regulatory framework in Spain, compared to that of other EU countries, and highlight, in this regard, the stability and quality of the “regulatory environment”, which for some of those interviewed are “superior to those of other European countries”. However, Chinese businessmen believe that there is ample room for improvement in “institutional support”, although they highlight the importance of the central and regional Spanish Investment Promotion Agencies (IPAs), which “offer more and more personalized support to Chinese investors”.
As regards the Spanish economy, in an economic and geopolitical context marked by inflation and restrictive monetary policies, Chinese companies show a remarkable optimism regarding the economic context of our country, whose position, in their opinion, is improving compared to the rest of Europe. In this sense, 78% of the companies surveyed believe that the Spanish economy will grow in the next twelve months, 19% expect it to remain at current levels and a scant three percent believe it will worsen. In this context, 46% of the businessmen expect to increase their investments in Spain this year and 50% will maintain their investments at their current levels. In addition, 57% expect to increase their workforce and almost 50% are confident that their international presence will evolve positively in the next twelve months.
Profile of Chinese companies in Spain
65% of the companies surveyed established their headquarters in Spain during the decade from 2010 to 2020. The predominant types of establishment are subsidiaries, branches and M&A (mergers and acquisitions), among others, data that, according to the study, show “the serious and long-term commitment to the Spanish market”.
Of the Chinese companies established in Spain, almost seven out of ten chose the Community of Madrid (65%) to carry out their activity, followed far behind by Catalonia (18%). In addition, of the activity carried out by sector, the transport sector and logistics platforms stand out, followed by the industrial sector, consumer and retail, banking and insurance, infrastructure and engineering, technology, energy and telecommunications, among others.
The study reflects a great diversity in terms of both turnover and size of Chinese companies. On the other hand, 30% of the companies sell all their products and services in the Spanish market and 35% of the companies export less than 25% of what they produce. In addition, 34% invest in R&D. In this regard, the companies surveyed highlighted Spain’s role as an epicenter of digital transformation, innovation and ESG approach (social, environmental and good governance commitment), aspects “that Chinese companies are recognizing and actively adopting in their strategies”.
