China is strategically buying up key technologies in Germany while
protecting its own companies against foreign takeovers with
"discriminatory requirements", German
Economy Minister Sigmar Gabriel
said on Saturday.
Gabriel, also vice chancellor and leader of Germany's Social Democrats,
heads to China next week after having ratcheted up tensions with Beijing by
putting the brakes on the latest Chinese takeovers of German technology
companies.
In a guest column for Die Welt newspaper, Gabriel urged the European
Union to ensure a level playing field and adopt a tougher approach with China.
"Nobody can expect Europe to accept such foul play of trade
partners," Gabriel wrote, adding that Germany was one of the most open
economies for foreign direct investments.
In China, on the contrary, foreign direct investments by European
companies are being hampered and takeovers are only approved under
discriminatory requirements, he said.
"But China itself is going on a shopping tour here with a long list
of interesting companies - with the clear intention of acquiring strategically
important key technologies."
Under German law, the government can block takeovers only if they
jeopardize energy security, defense or financial stability.
Gabriel is pushing for a Europe-wide safeguard clause which could stop
foreign takeovers of firms whose technology is deemed strategic for the future
economic success of the region.
WARNING ON WTO STATUS
The minister said China would not be granted the important status as a
market economy under the rules of the World Trade Organization (WTO) if it did
not change course.
"If China wants to get the market economy status, then it also has
to act accordingly," Gabriel told Frankfurter Allgemeine Sonntagszeitung
in an interview.
The EU is debating whether to grant China "market economy
status" from December, which Beijing says is its right 15 years after
joining the WTO.
Market economy status would make it harder for Europe to impose
anti-dumping duties on Chinese goods sold at knock-down prices because it would
change the method for determining a fair price.
Despite her deputy's tough words, Chancellor Angela Merkel views China as
a strategically important partner, not only to do business with but also in
foreign policy. It remains one of Germany's most important trading partners and
60 business executives will join Gabriel on his five-day trip.
This year to date, Chinese investors have racked up 47 deals to buy
German targets with a total volume of 10.3 billion euros ($11.3 billion),
according to Thomson Reuters data, compared with 29 deals worth 263 million
euros in the whole of 2015.
Deputy Economy Minister Michael Machnig told the Financial Times that
Berlin was worried about takeovers that seemed to be driven by the Chinese
government or were about gaining access to German technology.
"We need to have the powers to really investigate deals when it is
clear that they are driven by industrial policy or to enable technology
transfers," he said. "When necessary, in exceptional cases, maybe
even to say we're not going to allow (them)."
Gabriel's visit comes a week after his ministry withdrew approval for
Fujian Grand Chip Investment Fund (FGC) to buy chip equipment maker Aixtron,
citing security concerns.
The government is also scrutinizing the sale of Osram's general lighting
lamps business Ledvance to a consortium of Chinese buyers.
Gabriel has struck increasingly protectionist tones since Chinese home
appliance maker Midea made overtures back in May for robot-maker Kuka - a
national champion in Germany's push to hook up machinery to the Internet.
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