Interview: Chinese investments in the Netherlands expected to increase: Dutch official

China's investments in the Netherlands are expected to increase further in the coming years as Chinese enterprises established in the country add new corporate functions, while new industry sectors attract additional projects, the Netherlands Foreign Investment Agency's (NFIA) Commissioner Jeroen Nijland told Xinhua in an interview.

Nijland made this remark in an interview with Xinhua days before joining a trade mission to China chaired by Dutch Prime Minister Mark Rutte.

Accompanied by a delegation from the Dutch business community, Rutte kicked off his 5-day visit to China on Tuesday. Among other activities, he will participate in the Boao Forum for Asia.

MORE CHINESE TESTING THE WATERS

"Chinese enterprises have mostly invested in the sectors of industrial engineering, consumer and household goods, ICT and electronics," said Nijland, head of NFIA, which facilitates direct investments of foreign companies to the Netherlands, China's second largest trading partner and third most popular destination of investment in the European Union.

"These four industry sectors will continue to top the Chinese investment portfolio in the future. But, we notice that new sectors, such as e-commerce and agrifood, are attracting additional investment," he noted.

According to figures released earlier this month by NFIA, China ranks as the second largest investor in the Netherlands, following the United States and ahead of South Korea and India.

By the end of 2014, after more than a decade of solid investment growth, 500 Chinese companies had set up operations through greenfield projects in the Netherlands, amounting to more then 800 million euros in capital and employing more then 8,000 people.

By far, the largest Chinese investment made last year was in the agrifood sector. Ausnutria Dairy Corporation, a leading pediatric milk formula company in China, embarked upon the construction of a milk processing unit in the province of Friesland, creating 150 new jobs and investing 150 million euros (163 million U.S. dollars).

In the field of e-commerce, Light in The Box, an online discount store trading items from China to countries throughout the world, also invested in the Netherlands last year.

"Eighty Chinese enterprises are included in our portfolio of companies, thinking to invest here," said Nijland.

TENDENCY OF ORGANIC GROWTH

Another tendency that will push Chinese investment to new highs in the Netherlands, according to Nijland, is organic growth of existing companies.

"We estimate that in the future one third of the total investments made by Chinese investors will come from expansion," he said.

"We will increasingly see companies from China following into the steps of Huawei, which was among the first Chinese companies to expand in the Netherlands with just around 20 people initially. Today, the telecommunications giant employs around 600 people in the Netherlands," he added.

Rather than simply doing marketing and sales in Europe, Chinese enterprises' operations in the Netherlands are being given additional functions, including the setting up of their European headquarters or the establishment of R&D centers.

Last year, Chinese dairy giant Yili Industrial Group established the first overseas Chinese dairy R&D centre in the Netherlands with Wageningen University.

NETHERLANDS AS GATEWAY TO EUROPE

NFIA's research shows that more than 60 Chinese companies are operating marketing and sales offices, the first step usually taken by foreign companies when they enter the Dutch market. Furthermore, more than 60 have expanded in creating distribution centers, while 50 have located their European headquarters functions in the Netherlands.

"The strategic position of the Netherlands as a hub to enter the European markets is the main reason for the expansion of Chinese companies in the country," according to Nijland.

Most of the Chinese companies in the Netherlands are based in the northern and southern part of the country as well as in the province of Braband, where Eindhoven is located, a trend-setting centre of innovation and technology. Last year, OPPLE Lighting, a leading lighting manufacturer based in Shanghai, opened a distribution centre in Eindhoven generating 35 new jobs.

Other Chinese investors, who sought to expand through greenfield projects last year in the Netherlands, include Gushen Group, an international leading supplier and producer of soy proteins and soy health-care foods, Shanghai Green Leaf Group, specializing in the R&D, production and sale of natural menthol, Roylite, a professional stage lights manufacturer, Pantum, a leading producer and provider of printers.

NEW SILK ROAD IMPULSE

"As Chinese enterprises continue to internationalize they will increasingly be attractive partners for Dutch companies. In addition, given the continuous growth of its economy China will increasingly be of interest to Dutch companies. So the economic ties of the two countries will become even stronger boosting further Chinese investment here," said Nijland.

The development of the new Silk Road, the project envisioned by the Chinese government aiming to connect western China to Europe by rail would lead to even stronger economic ties between the two countries, positively affecting Chinese investment in the Netherlands.

"This development is highly interesting to the Netherlands as we hold a strong distribution position in Europe. We are already in talks with the local authorities of Sichuan and Chongqing, while the Chinese rail company has already established an office in Rotterdam. The new Silk Road is an initiative that would provide impulse to further strengthen ties between the two countries," said Nijland. Endit