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Berlin May Give Green Light to a Chinese Takeover of German Chip Factory, Ignoring Opposition from Intelligence

On Thursday October 27, the German newspaper Handelsblatt cited government sources that the German Economy Ministry is reviewing a deal that a China-controlled company proposed for German chipmaker Elmos.

Last December, Elmos, headquartered in Dortmund, agreed to sell its production line to Swedish chipmaker Silex, a wholly owned subsidiary of China’s Sai Microelectronics Group. The Federal Office for the Protection of the Constitution (BfV), the country’s chief domestic intelligence agency, gave advanced warning to the government and advised against the deal because China’s mastery of the key technology would enable it to put pressure on Germany. Handelsblatt revealed that the German federal government neglected the advice and was ready to approve the deal.

Aniessa Andresen, Chairperson of the Hong Konger in Germany, told Radio Free Asia that Germany continues to sell its own infrastructure projects and key technological companies to China, even though it has realized that it cannot rely on China. It is puzzling and worrying that the chip deal is still going forward even after warnings from German intelligence agencies. Andresen called on Germany not to become a pawn of the Chinese Communist Party (CCP).

German Economy Minister Robert Habeck, who resisted the acquisition of the Hamburg port terminal by the Chinese state-owned COSCO Group, did not take the same tough stance in the chip deal, giving the reason that “Elmos” technology was “obsolete” and of little value, and that the Chinese could not acquire the needed technology to drive its development.

Taiwanese political researcher Li Youtan pointed out that the “Elmos” incident is similar to China’s acquisition last year of the UK’s chip plant Newport Wafer Fab through the Dutch firm Nexperia, which is controlled by China’s Wintel Technology Corporation. Li believes that the CCP showed its ambition to dominate the world after the 20th National Congress, but is thwarted by its lack of chip technology. If Germany allows the Elmos deal to go through, it will become a weak link in the democratic world.

German Chancellor Olaf Scholz will travel to China and become the first EU leader to meet Xi Jinping since the 20th CCP Congress. This comes after he drew criticism for backing Chinese state-owned COSCO’s stake in the Port of Hamburg amid a boycott by six federal cabinet ministers.

Source: Radio Free Asia, October 28, 2022