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DW: German Government Warns against China’s Acquisition Efforts and Encourages European Companies to Join Forces to Face Competition from China

The German Government has issued warnings about China’s escalated acquisition efforts and has encouraged European companies to join forces in order to face the competition from China. Deutsche Welle reported that China has been obtaining top technology through the acquisition of foreign companies. It has also been acquiring infrastructure projects in Europe in order to gain political influence. Thomas Bareiß, Secretary of the Committee on Economic Affairs and Energy, said that the German Government inspected 80 acquisition proposals in 2017 and 30 percent of them were acquisition requests from Chinese companies. Bareiß has issued warnings before and said that, although Germany is a country that is very open to foreign investment, it shouldn’t underestimate the acquisition efforts that these Chinese investors have put forth and all the Eastern European countries should unite together on this issue. He said, “We can’t be too naive and too reckless. The competition in the international community requires a tough position. We are willing to face it, but it must be under fair and equal rules of the game. We are still far from it because the investment environment around the world is very different.” Recently, for the second time, China’s State Owned Company, the China Grid Corporation of China (SGCC) failed to acquire a 20 percent stake in the German transmission system operator, 50Hertz. The deal was awarded to the domestic development bank KfW after the intervention of Germany’s Federal Government. Meanwhile Bareiß also acknowledged that Germany needs more strong companies and it is more meaningful if the cooperation is among European companies such as Siemens and Alstom. Three years ago, the China National Automobile Group became the world’s largest railway vehicle manufacturer through merger and acquisition. Early this year, Siemens and Alstom decided to join forces to face off against the competition from the China National Automobile Group.

Source: Deutsche Welle, August 19, 2018