China's ownership and control over German companies
China and Germany's relationship over the years has been in flux. Chancellor Angela Merkel has in her tenure welcomed new and improved ties with Beijing, providing President Xi Jinping with a developed country in Europe to invest in. In recent months, Mrs Merkel has moved to distance herself and Germany from China in light of the vast human rights abuses against Uighur Muslims in the country's northwestern province of Xinjiang.
With the wealth of Chinese interests in Germany, this might
be too little too late, however.
As she prepares to vacate Germany's Chancellor role, her
Christian Democratic Union (CDU) party's candidate, Armin Laschet is widely
expected to forge even closer ties.
In his first major foreign policy speech last week, he
promised to maintain the bond that has seen Germany account for half of all EU
exports to China.
He also pledged to bolster a number of other policies
including the Comprehensive Agreement on Investment (CAI), an EU-China specific
deal secured, controversially, in the waning days of 2020.
China experts warn that such deals prove that the country is
transforming from a purely economic power to a political power.
One way it has done this is through vast investment and
company takeovers, some of which are connected to state-owned businesses.
Germany is one of the best cases in example whose market
China has flooded with buyouts.
The list goes on, but Express.co.uk has collated some of the
most significant takeovers - and failures - that present potential threats to
German and European security and industry.
Frankfurt Airport
HNA Group Co Ltd is a Chinese conglomerate based in Haikou,
Hainan, China.
In 2017, the group acquired a majority 82.5 percent stake,
the first such purchase of an overseas airport by HNA.
At the time, China Daily reported: "It is also the
latest in a succession of acquisitions mounted by the company of various
international assets, in order to step up its global expansion."
The group isn't state-owned, instead owned by a handful of
individuals and companies based mostly in China, although George Soros, the
billionaire philanthropist, once held a stake but has since sold it.
Daimler, car manufacturer
Geely owns a 9.69 percent stake in Daimler, a car
manufacturer, worth $9billion (£6.4bn).
The car manufacturer is owned by Chinese billionaire
business magnate Li Shufu, and was the country's first non-state-owned car
carmaker, started in 1997.
Kuka, robot maker
Midea owns 95 percent of Kuka, an industrial robot maker.
The Chinese company - publicly listed - bought a 25 percent
stake in the German robotics manufacturer in 2016.
By the next year, it saw the potential of owning a
European-based and world-leading robotics expert, tipped to help speed up
automated production further, and secured a 95 percent stake.
Kuka's estimated worth at the time of the share acquisition
was €4.6billion (£3.9bn).
Aixtron SE, failed
China's Fujian Grand Chip Investment Fund takeover of
Aixtron SE - a chip equipment maker - failed after then US President Barack
Obama blocked the deal.
The German company was ready to secure the transaction in
2016, but it was thwarted at the last minute over concerns and growing
objections in Germany and the US of China buying up firms with strategic
technologies abroad without allowing reciprocal transactions at home.
The €670million euro (£580m) takeover offer was already in
doubt after the German government withdrew its approval, reportedly at the US’
bidding.
Mr Obama had before this stopped Fujian from buying Aixtron
US following an assessment by the Committee on Foreign Investment in the United
States (CFIUS), an inter-agency task force under the Treasury Department.
KraussMaffei Group
In 2016, the state-owned Chinese chemicals company,
ChemChina, bought machinery maker KraussMaffei Group for about $1billion
(£707bn).
It was the biggest-ever Chinese acquisition of a German
company.
At the time, Reuters noted: "The deal is the latest
example in recent years of deep-pocketed Chinese companies seeking to gain the
technological expertise, distribution networks and branding of Western firms,
often built up over several decades."
It came as China's currency was weakening and the country
encouraged companies to shift investments overseas in order to drive more
dealmaking.
Cotesa, aerospace suppliers
In 2018, China’s Advanced Technology & Materials
(AT&M) - whose largest shareholder is a state-owned company - took over
German aerospace suppliers Cotesa.
On hearing of the deal, the German economy ministry launched
a review after tightening its rules on foreign corporate takeovers, concerned
that important technology and know-how was being transferred to foreign
countries.
Leifeld Metal Spinning, failed
In the same year, the Chinese takeover by Yantai Taihai of Leifeld
Metal Spinning was blocked by Germany's government.
A government source said: "The cabinet today decided to
grant authorisation for a veto.
"This authorisation allows for vetoing the purchase of
a domestic company by a foreign company for security reasons."
IMST, communications technology, failed
Late in 2020, just days before the EU secured an investment
deal with China, Germany blocked the takeover of satellite and radar technology
firm IMST by a subsidiary of state-controlled missile maker China Aerospace and
Industry Group (CASIC).
The German government, as in past cases, said it was due to
national security concerns.
Berlin views IMST as an important provider of satellite
communication, radar and radio technology.
Its knowledge of such technologies is crucial to Germany and
Europe.
Mrs Merkel's cabinet is said to have on this occasion grown
concerned over unfair competition caused by state-backed enterprises and
restrictions on market access.
In the 2017 research journal, 'Chinese investment in Europe:
corporate strategies and labour relations', authors Shuwen Bian and Oliver
Emons note that China's activities in Germany appear symptomatic of its global
agenda.
They say China is moving from being an Foreign Direct
Investment (FDI) country, to an FDI export country.
Since the turn of the century, it has started to invest more
in countries around the world, especially in Europe, compared to the other way
round.
The authors note how China seems to have used investment in
companies in countries like Germany in order to dodge EU tariffs on products.
They wrote: "Circumventing trade barriers: Chinese
companies also invest in Germany and Europe in order to circumvent EU tariffs
on their products.
"Fifty six out of 73 current EU anti-dumping measures
concern Chinese imports.
"Hitherto, higher tariffs on imports of steel, solar
modules and other products have been possible because the EU does not recognise
China as a market economy.
"Only this May, China’s request to be recognised as a
market economy was rejected by a majority in the European Parliament.
"Given the EU’s trade protection instruments it is not
surprising that the solar industry was one of the earliest target sectors in
Germany.
"Chinese investors have either taken a stake in German
solar farms or have taken them over."
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