On Friday, in a significant development, German Economy Minister Peter Altmaier said, it is critical that Germany sets up a new government body which will have the power to quickly decide whether it should take stakes in strategic domestic companies so as to prevent their takeover by foreign powers.
These plans come at a time when the European Union, as a whole, is reviewing its industrial strategy and relations vis-a-vis China, even as it faces increased investments in critical sectors by Chinese state-owned enterprises.
Altmaier presented his new industrial strategy, which includes plans to set up a standing committee which, as a last resort, could decide to take stakes in key German companies that produce sensitive or security relevant technologies.
Stakes thus acquired, by Germany’s KfW state development bank, would be held temporarily. Although this can already be done in select cases under German law, Altmaier said, the process was too slow.
“Structures have to be created to take the necessary decisions faster and more efficiently than has been the case thus far,” said Altmaier in his “Industry Strategy 2030”.
Under this strategic plan, Germany aims to step up screening of non-European investors that want to acquire firms in key industries.
The move is largely seen as targeting Chinese state-backed investors.
German officials have described the Chinese takeover of Bavarian robotics firm Kuka in 2016 as a wake-up call that underlined the need to shield strategic parts of the country’s economy.
In 2018, China’s State Grid tried to acquire a stake in power grid operator 50Hertz. Following unsuccessful attempts by Berlin to find an alternative private investor in Europe, German state-owned bank KfW stepped in to keep the Chinese out.