SUMMARY
- Team building is important for Chinese investments in Germany
- Investments in Germany need patience
I. Team building is important for Chinese investments in Germany
Chinese investors are very popular with German shareholders. However, with their help, German entrepreneurs are able to not only enter the huge Chinese market, but also Asia-Pacific. Therefore, the future of a company can be secured with Chinese support. Chinese investors enjoy a great reputation insofar as they are known to pay very well. German media and public representatives draw a different picture of such transactions. This coverage can simply be ignored. It is also irrelevant that Chinese investments has cooled-down due to the pandemic. Germany is also a popular destination for Chinese business immigration.
A decision to invest in Germany has to be justified not only in regard to the economic background, but also in the context of legal and particularly cultural aspects.
From a legal point of view, European and German cartel authorities are to be considered. Investments from outside the European Free Trade Zone can be limited by German foreign trade legislation. Furthermore, idiosyncrasies of German law – for instance, corporate co-operation – need to be regarded. Last but not least, a close coordination with the Chinese central authorities is useful, too.
The challenge for investors is to be seen in inspiring all participants for an acquisition. Here, the perspective of a long-term successful cooperation to the benefit of all parties is decisive to lift reservations.
II. Chinese investments in Germany need patience
Culturally, German negotiators are usually not as patient as their Chinese counterparts. Chinese investors should not let themselves be put off by this at all. In addition to that, there is no need to adopt the Western European and North American practice to have their advisors conduct due diligence completely. All in all, for German shareholders, it comes down to the purchase price. To save face, hospitality or a courteous manner is not that important in German culture nowadays. Overconfidence and teachings of German negotiators should not be taken seriously.
Practice has demonstrated that Chinese investors have the stronger negotiation position due to the argument on prices: A great starting point for Chinese investments in Germany.
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