China m&a, impossible food, chinese investors, wolfgang maurer

China’s Investment Adventures #1/2: Impossible Foods & Possible Gains

Wolfgang Maurer

The times of Made in China as the country’s global go-to attribute are coming to an end. There’s a new trait in town and it’s safe to say it’s just as catchy: Made by China says hello.

The recent surge of outbound investments have secured China a place as a major player in the global investment market. In fact, China is even predicted to become one of the world’s largest overseas investors, tripling global offshore assets from $6.4tn now to nearly $20tn by 2020. And best of all, China comes not only equipped with abundant funds, but an image of confidence and expertise in future ventures.

A perfect example is China’s involvement in Impossible Foods, a Silicon Valley company seeking to disrupt the global food system by creating dairy directly out of plants. Investors include Google Ventures, Bill Gates, Khosla Ventures, and of course Li Ka-Shing’s Horizons Ventures.

However, there’s a catch, and it involves Europe. For while China joins Bill Gates & Co. in disruptive enterprises, in a Europe far, far away, debates continue about whether to allow Chinese investors into our markets in the first place. Why won’t European enterprises take the chance?

Challenge

It’s no news: Europe is no Silicon Valley. The daring spirit once characteristic during the industrial revolution has long dissolved into reticence and over-caution. This leads to both less innovation and also less inbound investment.

Particularly trusted industries such as the food industry are affected. We’re used to keeping nutrition sources as close as possible, which is understandable. However, this is no reason to exclude foreign funds to adopt better production technologies. Impossible Foods may be a particularly disruptive venture, yet it holds the promise of success by accepting foreign investments.

Here, the underlying problem is simple. Fear and misinterpreted motives are still prevalent among European enterprises. Ideas like a lack of products in Europe once foreign investment deals are closed still reign Europeans’ minds. And the further away geographically and culturally, the more ‘foreign’ – alas, perfectly represented by China.

However, completely rejecting a major global investor appears unwise. Recent news show a boosting of Chinese investment in the Eastern European region as well as in the US. Europe needs to catch up.

Change

It’s crucial to keep in mind that China shares similar fears. Chinese investors fear they have a disadvantage in the bidding process due to cultural differences – an obstacle on their side which can be easily removed by smart consultation to reach ideal targets in the most efficient way; help which some are still reluctant to take.

After all, China’s wants are simple: they have the funds and are seeking solid brands and know-how to grow globally.

Similarly, Europe needs new capital, a gateway to the Chinese market, and the chance to become a global, uprising name.

A shift in attitude is all it takes. Europe shares more ideological values with the Chinese than the US does and should consequently open up to economic investments. This would lead to a profitable and equally strong economic interdependence.

Essence

In an international world, success and innovation aren’t reached alone. Especially with funds flowing easier than ever, interdependence is key for mutual growth. Made by China is simply one of the biggest opportunities due to China’s new status as a major global investor.

By embracing Chinese investment, Europe could set the scene for sustainable growth on a large scale before the Chinese shift their focus wholly to (Eastern Europe and) the United States.

There is certainly something to learn and watch out for; and, if Europe dares to think big again, there is also (still) room to join in making the impossible reality.

Read Chinese Investment Adventures 2/2.

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