Germany Eyes Tough Rules on Foreign Investment Amid China Worry

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Chancellor Angela Merkel’s government plans to tighten restrictions on foreign takeovers amid growing concerns China is scooping up Germany’s technology jewels.

Economy Minister Peter Altmaier on Friday proposed setting up a government committee that could take action in the case of an unwanted foreign bid. State-owned bank KfW, for example, could temporarily buy a stake in the target company to stop an unsolicited acquisition.

Altmaier also proposed expanding reviews for investments by non-European Union companies that exceed a 10% stake in a company and pose a security risk. The rule, which so far applied only to defense and critical infrastructure, should also apply to areas of new technology, such as artificial intelligence, biotechnology and robotics.

“Our economic model can only survive if we strengthen it,” Altmaier told reporters in Berlin. “We will in the future look more closely at planned investments in robotics and biotechnology.”

Altmaier’s proposals have yet to be vetted by Merkel and her cabinet. While Germany is trying to sidestep a trade conflict between the U.S. and China, its government is also under pressure to curtail Chinese inroads into Germany’s industrial heartland. That includes calls at home and abroad to restrict Chinese equipment supplier Huawei Technologies Co. from participating in the country’s planned 5G network.

Germany has stepped up protectionist measures since the takeover of robot maker Kuka AG by China’s Midea Group Co. in 2016. That led Merkel’s government to rethink its tools for shielding technology companies and securing German competitiveness. Last year Merkel’s cabinet stopped a Chinese bid for the first time by vetoing the potential purchase of machine-tool manufacturer Leifeld Metal Spinning AG.

To contact the reporter on this story: Birgit Jennen in Berlin at bjennen1@bloomberg.net

To contact the editors responsible for this story: Ben Sills at bsills@bloomberg.net, Raymond Colitt, Iain Rogers

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