EU moves to stave off Chinese takeovers

The European Parliament on Thursday gave its green light to new powers to screen foreign takeovers in Europe’s strategic sectors, amid concern about investment by China.

The limited powers aim to protect EU sectors such as water, transport, communications and technologies, including semiconductors, artificial intelligence and robotics.

Sitting in the French city of Strasbourg, the parliament adopted the draft legislation by 500 votes for, 49 against and 56 abstentions. EU member states must still approve it.

Under the proposal, EU countries will have to supply, under certain conditions, information on foreign investment to other member states if public order or security is involved.

“Acquiring infrastructure, technologies or strategic interests is becoming a political objective,” French MEP Franck Proust warned.

“With this tool Europe will be able to better shield itself against the butterfly’s wing effect of investment,” said Proust, a member of the centre-right European People’s Party, the largest group in the assembly.

The European Commission, the EU’s executive arm which has pushed for such screening, has raised alarm over China, particularly Chinese telecoms giant Huawei’s bid to help build 5G mobile networks in the bloc.

“This legislation is of course totally neutral and nondiscriminatory,” EU trade commissioner Cecilia Malmstrom said on Wednesday. “But it is no secret if you follow the debate in certain countries right now ... there is a question on China. There could be other countries as well.”

The plan fulfils a request by French President Emmanuel Macron, backed by Germany and Italy, that Brussels draw up a strategy to counter a wave of takeovers by Chinese companies in Europe.

WITH THIS TOOL EUROPE WILL BE ABLE TO BETTER SHIELD ITSELF AGAINST THE BUTTERFLY’S WING EFFECT OF INVESTMENT