Bavaria Wants to Keep Chinese Investors Away From German Companies – Report
AP Photo/ Elizabeth DalzielBusiness19:47 13.03.2018(updated 19:51 13.03.2018) Get short URL3132
The German federal state, home to the world’s leading industrial concerns BMW, Siemens and others is reportedly preparing stricter limits for Chinese stake buyers amid fears of stealing technology and threats to industrial security.
Bavarian authorities are preparing new legislation, which lowers the stake barrier for Chinese investors from the current 25% to 10% maximum share, according to the local outlet Augsburger Allgemeine. The southern German state is set to introduce the proposition to the national parliament after several acquisitions by Asian tycoons have alarmed Europe’s largest economy.
The most recent one is the deal between carmaker Daimler, famous for its Mercedes brand, and China’s Geely, which gained a 10 percent stake in the German icon. Although the Chinese concern’s chairman Li Shufu, who branded himself as an independent entrepreneur, reassured the Bild am Sonntag that he had not taken a “single cent” from the Chinese authorities, in his comment for the Chinese CCTV he stated his goals are to “support the growing Chinese car industry” and “serve national strategies.”
Last year another Chinese giant, the HNA Group built up a nearly 10 percent share in Germany’s biggest financial institution Deutsche Bank, becoming the largest stakeholder.
The protectionist calls grew louder after the bid of the Chinese State Grid Corporation for a 20 percent stake in a German power local grid operator 50Hertz Transmission.
READ MORE: Aiming for Technological Superpower Status, China Buys Up German Companies
The Augsburger Allgemeine has cited Manfred Weber, a prominent member of the European Parliament and a party ally to outgoing Bavarian Premier and future German Interior Minister Horst Seehofer, who is said to be behind the proposed legislation. Weber told the paper that Europe had to do more to protect strategically important countries.
“We have to be more consistent. China has been strategically active in Europe for a while, taking over or buying stakes in companies, in Portugal, Greece, the Western Balkans, but also in Germany,” the politician told the media.
The first step was taken last year as Germany tightened the existing regulations, enabling the authorities to block deals with foreign investors in “critical infrastructure” concerns if the acquisitioned stake exceeds 25 percent. It also expanded the period authorities may examine the takeover.