NFIA China: active search for Chinese investors

Chris Teunissen, a banker with 26 years of experience in Asia and China in particular, was recently appointed as Executive Director of the Netherlands Foreign Investment Agency (NFIA) China. Operating from the embassy and three consulates in China, Teunissen and his staff of 10 experts are looking for Chinese companies that could benefit greatly from investing in Europe. Club China asked Teunissen for his recipes for success.

Over the past five years, greenfield investments by Chinese companies in The Netherlands total about US$750 million. M&A deals are at US$5 billion. Today, 529 Chinese enterprises are operating in The Netherlands, which is the third largest destination in the European Union for Chinese investment – after Germany and Britain and ahead of France and Italy. A large number of these companies were supported by the NFIA in the establishment of their distribution centres, R&D facilities, and regional or European headquarters. Chris Teunissen, who worked with ING, Fortis and some well-known local banks, not only speaks Mandarin, he has also learned to master the language of Asian businesses.

As a former banker, how do you look at this new job?

“Contrary to the Hollywood characterization, I would say that a successful banker is first and foremost a 'manager of risk'. Investment is a high-risk business, and cross-border investment is a further step-up in risks for an entrepreneur. By managing risks well, I have supported many investments into China for the past 25 years. In my new job, I can do exactly the same now for Chinese entrepreneurs who are investing in the Netherlands and in Europe.”

Why do Chinese investors prefer The Netherlands?

“There are the obvious reasons, like the integrated transport system, the well-educated work force and the strengths in logistics and services. But there is more. Foreign investment is still in its infancy and as such tied closely to Chinese investor’s ‘domestic commercial interests’. Surprising as this may sound: many Chinese companies view settling in The Netherlands as a way to improve their market position at home.”

How?

“Dutch and European knowledge can strengthen the competitive advantage of a company or product in China. Chinese companies are looking to cooperate to get access to technical knowledge, R&D, certification and branding opportunities. For example, owning a dairy plant in Europe opens up opportunities to have a company’s product certified according to high western standards in food safety. Being able to show a European quality seal on one’s products at the home market in China offers a major competitive advantage. Many of the 500 Chinese companies, including high tech and services firms, have this ‘qualitative interest’ as an important motivation to look for establishment, partnerships and investment opportunities.”

How do you get in touch with Chinese company that are ready to invest?

“Being a matchmaker between China and Europe, we do not wait for the phone to ring. We actively engage with Chinese enterprises that should consider spreading their wings or that seem like a perfect match for a grassroots investment, partnership or selectively even a takeover. Most of the time, we aim for a match with one of 11 regions, like Rotterdam and Amsterdam for their seaport and airport, Limburg for medical and chemical research, Eindhoven for its strength in high-tech and innovation, Brabant for its strong manufacturing profile or what we call the ‘Dairy Valley’ in the agriculturally-oriented north of country. We know the various fertile investment soils and try to find the Chinese companies that fit well. That is a tough but rewarding job.”

Getting CEO’s interested requires telling great stories and dismissing others. What is the biggest misconception among Chinese entrepreneurs?

“The welfare state – also known as Fortress Europe – is always the ‘elephant in the room’ in every first meeting with a business. The Chinese have the idea that the European and Dutch labour market and social security systems are rigid and will hinder their business. ‘What if things get tough, will our payroll become a bleeder?’ First we explain to them the market is more flexible than they think. Then we suggest them to make three phone calls to Chinese businesses that have crossed over to Europe. ‘Call them, they will tell you about the flexibility.’ In a way Chinese companies sell our investment opportunities to each other – it is a story that tells itself.”

What is, in your opinion, the best-kept secret about this small country?

“It is the open, inviting ecosystem. When a Chinese company decides to have its European headquarters, sales office, production plant or logistics centre here, it will be met with entrepreneurs that are eager to do business. Authorities, suppliers, business partners and others: they are open, well-educated and entrepreneurial. That is truly a wonderful investment climate for any business to prosper in.”

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