German minister blasts China’s policy on takeovers

CHINA was strategically buying up key technologies in Germany while protecting its companies against foreign takeovers with “discriminatory requirements”, German Economy Minister Sigmar Gabriel said on Saturday.

Gabriel 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 EU to ensure a level playing field. “Nobody can expect Europe to accept such foul play of trade partners,” Gabriel wrote.

He said in China foreign direct investments by European firms were being hampered and takeovers were only approved under discriminatory requirements. “But China itself is going on a shopping tour here… with the clear intention of acquiring strategically important key technologies.”

Safeguard clause

Gabriel was pushing for a Europe-wide safeguard clause, which could stop foreign takeovers of firms whose technology was deemed strategic for future economic success.

He said China would not be granted the important status as a market economy under the rules of the World Trade Organisation (WTO) if it did not change course. The EU was debating whether to grant China “market economy status” from December, which Beijing said was its right 15 years after joining the WTO.

However, Chancellor Angela Merkel views China as strategically important and it remains one of Germany’s most important trading partners. This year to date, Chinese investors racked up 47 deals to buy German targets with a total of €10.3 billion (R156bn), according to Reuters, compared with 29 deals worth €263 million last year.

Gabriel’s visit comes a week after his ministry withdrew approval for Fujian Grand Chip Investment Fund to buy Aixtron.