To increase Chinese investment in Europe, concrete steps are needed. On the European side, people must banish their fears of China, realizing that Chinese investment in Europe benefits both sides.

On the Chinese side the following is needed:

1. A better understanding of Europe's investment environment and market conditions. It is only a little more than a decade since China implemented the "going global" strategy, so in many ways Chinese investors lack experience. However, Europe is not without risk, so Chinese firms need to gain a thorough understanding of the investment environment and market conditions of the host country.

It is wrong to assume every Chinese investment project in Europe should succeed, but it is crucial to know why it succeeds or fails.

2. Chinese investors adapting to local conditions. Every nation has its own legal system, cultural traditions and business norms. The investors need to understand that what is possible in China may be impossible in the host country. Moreover, Chinese investors need to be more involved in social responsibility in Europe.

3. Paying attention to the impact of the Treaty of Lisbon on China-EU bilateral investment treaties. This came into effect on Dec 1, 2009, two years after it was signed. It introduced two big changes in trade policy: It strengthened the EU's role by confirming that all key aspects of trade policy, including issues related to foreign-direct investment, are areas of exclusive EU competence; and it increased the powers of the European Parliament in trade policy.

These two changes will have great implications for foreign investment in the EU. Before 2009 China had signed bilateral investment treaties with most of the EU members. These treaties should not be terminated or superseded automatically under either international or EU law. However, they may have to be modified in accordance with the requirements of EU law, so China needs to pay attention to what the EU will do regarding these bilateral treaties.

4. Encourage private enterprises to go global. China's private enterprises have expanded greatly, and many have the capacity to invest in Europe and elsewhere.

In June China's National Development and Reform Commission, with 12 other governmental organizations, publicized a document setting out 18 measures to encourage more private enterprises to make outbound investment. These measures include more guidance and coordination from the government, more tax incentives, more financial help, easing customs procedures, more efficient government authorization, and more diplomatic protections against country risks.

The author is deputy director of the Institute of European Studies, Chinese Academy of Social Sciences. The views do not necessarily reflect those of China Daily.