LISBON, Portugal – When two Chinese companies appeared among the bidders to buy a troubled Portuguese bank this year, its staff took heart.
The reason? They believed the potential buyers would do what Chinese investors are increasingly doing in Europe: save badly needed jobs and invest in expanding the business.
Flush with cash, Chinese buyers are shopping for foreign brands and technology to improve their competitive edge and propel their global expansion. Unlike Western buyers that might cut staff or close operations that duplicate their own, Chinese companies have an incentive to hang onto experienced foreign employees and expand.
It's an unusual position for China after being cast for years as the country that drained manufacturing jobs from the West. For Europe's battered economies like Greece or Portugal, it's welcome relief as they try to tame rampant unemployment.
Rui Riso, head of the 41,000-member Portuguese bank workers' union, says Chinese acquisitions in Portugal have not disrupted business.
"The companies have essentially stayed on the path they were on. And that is what we want for Novo Banco, too — a strategy based on continuity," he said.
For Chinese firms, the pressure is mounting to diversify investments as growth at home, in the world's second-largest economy, slows and wages and other costs rise.
"Overseas investment is really core for a lot of firms," said Andre Loesekrug-Pietri, founder and chief executive of A Capital, a firm in Beijing that invests with Chinese partners in European assets.
Employees of Volvo Cars fretted about possible job losses or changes in work practices when the Swedish automaker was acquired by China's Geely for $1.8 billion in 2010. Instead, Geely launched an $11 billion effort to transform Volvo into a global brand that has preserved Swedish jobs and added manufacturing capacity.
In Oslo, labor groups say the Chinese have been model employers since a subsidiary of state-owned ChemChina acquired Norway's Elkem in 2011.
As the construction business slumped after the 2008 financial crisis, German concrete pump maker Putzmeister shed more than a fourth of its 3,800-strong workforce. Following its 2012 acquisition by China's Sany, the German company's workforce rebounded to above 3,000 last year, when the company reported its strongest revenue in seven years.
This year, ChemChina bought a 26.2 percent stake in Italian tire manufacturer Pirelli and said it would offer to buy the rest. Pirelli's chairman, Marco Tronchetti Provera, promised "no impact on employment" — and kept his own job, too.
The deal will "allow immediate growth in volumes and market share that Pirelli alone would have taken years to achieve," said Tronchetti Provera.
The leading European destinations for Chinese investment are Britain, Germany and France, according to a June ranking by the Mercator Institute for China Studies, a Berlin think tank, and New York-based Rhodium Group, a research and advisory company. Investment in the European Union from China was more than 46 billion euros ($52 billion) from 2000 to 2014, close to the $54 billion China invested in the U.S. over that period.
The survey found no evidence Chinese companies were shifting European jobs to China. Instead, it concluded the Chinese were adding staff and expanding European research and development operations.
The Chinese bidders for the Portuguese bank, Novo Banco, were Fosun International, a Shanghai-based conglomerate, and Beijing-based Anbang Insurance Group Co. Others in the race were Spain's Santander and U.S. private equity group Apollo Global Management.
Fosun already owns 80 percent of Caixa Seguros, one of Portugal's biggest insurers, and France's Club Med. Anbang last year bought New York City's Waldorf Astoria.
The acquisition of Novo Banco, if completed, would be the largest Chinese purchase in European financial services. The sale was postponed last month amid litigation involving the bank and uncertainty over European capital requirements.
In Europe's smaller countries, China's investments can have a big impact.
Portugal came fourth in the ranking of Chinese investment in Europe, with Britain first. But the 5.1 billion euros Portugal has received is equal to almost 3 percent of gross domestic product, whereas for Britain the ratio was just 0.45 percent.
Chinese investment in Portugal started in 2011 with the acquisition by China Three Gorges Corp., the world's biggest dam operator, of a controlling stake in national power company EDP-Energias de Portugal.
EDP gave the Chinese wind power technology and an immediate international presence through EDP's interests in 14 countries, including 12 American states.
As Portugal's unemployment rate soared to 17.7 percent in 2013, EDP shed no staff and has had no friction with labor groups. It kept the same management and business strategy.
Three Gorges beat rival German and Brazilian bidders by paying a 53 percent premium on EDP's share price. It also committed to providing EDP, which has 17 billion euros in debt, with a loan of 2 billion euros and an additional 2 billion euros for investments.
The following year, the Chinese became Portugal's utility industry leaders when government-owned State Grid Corp., which operates most of China's electricity distribution network, bought 25 percent of energy distributor REN.
Miguel Santos Neves, a professor at Lisbon's Autonomous University who has studied Chinese investment in Europe, warns much larger China could exert political pressure in return for investments.
The privatizations "were a good deal" for Portugal, he said, but added: "The issue is the long-term implications of putting all your eggs in the same basket."
In job-hungry Portugal, though, not many people are listening to warnings.
"The good thing (about EDP) for the Chinese was that our know-how helps them to expand internationally, using us as a base," said Orlando Ribeiro, a 35-year veteran of the company. "For us, the good thing is that we got to keep our jobs."
McDonald contributed from Beijing. Other contributors were Karl Ritter in Stockholm, Colleen Barry in Milan, Mark Lewis in Oslo and Geir Moulson in Berlin.