“In order not to win a lot, in Spain I am better off.” This premise is what Leticia Chen, president of the Chamber for Spanish-Chinese Cooperation, usually stumbles upon when she tries to promote the jump to the Chinese market among Spanish businessmen. Disinterest has increased in the year just concluded, despite the consolidation of the Asian country as a great economic counterweight to the United States.
According to the latest data from the Secretary of State for Commerce, between January and September 2023, Spanish investments in the country fell to the lowest level since 1999. The effort is testimonial, of just 7 million euros, and contrasts with the annual average of about 200 million until the middle of the last decade. The figure only skyrocketed one year, in 2020, to 1,824 million, due to health investments in the middle of the pandemic.
The experts consulted attribute the stoppage to two factors. The first has been the real estate crisis of 2023 in China, which has caused the bankruptcy of hundreds of companies, and the second, the increase in geopolitical tension, with chips, Taiwan and relocations as background elements. They add to three years of closure of the country due to covid.
Added to this is the idiosyncrasy of the Spanish businessman. “If you want to go to China now, you either have a lot of money or a lot of know-how. Many Spanish companies have nothing to contribute in a market that the French and British arrived before,” says Chen. “In addition, Spanish businessmen do not have enough patience and tend to retire too soon,” he adds.
IESE professor Pedro Nueno, who founded a business school in China, encourages entrepreneurs. “Spanish companies should move a little more,” he says. “We have never had problems, but we have to have high-level people there, especially Chinese, capable of addressing distributors and companies in the country.”
Daniel Galván, director of the investment and wealth management bank GBS Finance, explains that between 2007 and 2009 Spanish companies were interested in China, but now they seem to “go back to basics” and look again at Latin America. In China, he explains, it is more difficult to find an ecosystem that is managed in English and regional differences are important. Added to this are “uncertainty and the fact that China is no longer as cheap as before.”
There is, however, a sector, that of automotive suppliers, very interested in the country. The chassis manufacturer Gestamp aims to obtain a third of its income there, while the interiors manufacturer Antolin, which also has plants in the area, wants to increase its bet. Teknia is also looking for an acquisition to take up positions.