Chinese direct investment into Europe tripled in 2011 to $10 billion, according to a new study that estimates Chinese companies are in the early stages of a global shopping spree that could see them spend as much as $250 billion-$500 billion in the region by 2020.

Although total Chinese outbound investment is still small compared to the size of its economy, most analysts believe the country is on the verge of ramping up its spending abroad, with crisis-hit Europe seen as one of the most attractive supermarkets.

" Europe is experiencing the start of a structural surge in outbound direct investment in advanced economies by Chinese firms,” says the new study, to be published on Thursday by Rhodium Group, an economic consultancy, in partnership with CICC, a Chinese investment bank.

The report predicts Chinese outbound direct investment will reach $1 trillion to $2 trillion between 2010 and 2020 and it expects around a quarter of that will go to Europe through mergers and acquisitions or greenfield investments.

Beijing has encouraged Chinese companies to increase their offshore investments to make them more competitive globally and also as a way of securing supplies of natural resources, technology and expertise for China.

" At current growth rates and without a change in Chinese government policy we expect an additional $800 billion in outbound Chinese direct investment in the five years from 2011 to 2016,” said Andre Loesekrug-Pietri, chairman of A Capital.

In the midst of the sovereign debt crisis, Europe was the number two destination for Chinese outbound direct investment in the first quarter of 2012, after South America, according to a report from A Capital due to be released on Thursday.

Chinese investment to Europe reached $1.7 billion in the first quarter and represented 83 percent of all outbound Chinese non-resources deals, the report found. If resources deals, aimed mostly at South America and Africa, were included, then Chinese total outbound direct investment reached $21.4 billion in the first quarter.

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