- Title: Germany blocks Chinese investment in two chipmakers after security concerns
- Date: 9th November 2022
- Summary: BERLIN, GERMANY (NOVEMBER 9, 2022) (REUTERS) GERMAN ECONOMY MINISTER ROBERT HABECK ARRIVING TO TALK TO JOURNALISTS MEDIA (SOUNDBITE) (German) GERMAN ECONOMY MINISTER, ROBERT HABECK, SAYING: "Good afternoon, Ladies and Gentlemen! I wanted to briefly inform you after the cabinet's meeting that today's cabinet agenda also included two investment reviews. Both were negative. In other words, both times we have prohibited a non-EU investor from entering companies in Germany. Both were justified on the grounds that the security of order in Germany must be maintained and protected and that critical production areas require special protection." HABECK SPEAKING / MICROPHONES (SOUNDBITE) (German) GERMAN ECONOMY MINISTER, ROBERT HABECK, SAYING: "What is important is the political message that we are an open market economy, that investments from abroad, including those from outside the Union and from abroad, are wanted and welcome here. But an open market economy is not a naive market economy. And as much as the general principle applies and must also be preserved - especially in relation to China, which we are talking about here. China is and should remain a trading partner - but we must not be naive and have to see when trade and market interests are used for political power and possibly used against the interests of the Federal Republic of Germany, so that we protect our own interests. JOURNALIST FILMING HABECK WITH PHONE (SOUNDBITE) (German) GERMAN ECONOMY MINISTER, ROBERT HABECK, SAYING: "We see a deliberate, strategic approach, especially in the area of semiconductors and microchip manufacturing, to influencing both knowledge discovery and production control. And that is why it is imperative to see the whole picture. And the whole picture means that we need to protect our critical infrastructure in various production areas in a better way." MEDIA HABECK SPEAKING GERMAN MINISTER FOR FAMILY AFFAIRS LISA PAUS TALKING WITH GERMAN MINISTER OF FINANCE CHRISTIAN LINDNER GERMAN MINISTER FOR SPECIAL AFFAIRS WOLFGANG SCHMIDT TALKING TO GERMAN CHANCELLOR OLAF SCHOLZ / SCHOLZ TALKING SEAT HABECK TAKING SEAT / GERMAN FOREIGN MINISTER ANNALENA BAERBOCK TAKING SEAT GERMAN CABINET BAERBOCK, HABECK, SCHOLZ AND SCHMIDT POSING FOR PHOTOS GERMAN INTERIOR MINISTER NANCY FAESER AND LINDNER POSING FOR PHOTOS GERMAN CABINET FRANKFURT, GERMANY (NOVEMBER 9, 2022) (REUTERS) TRADING FLOOR OF FRANKFURT STOCK EXCHANGE TRADER WORKING LOGO OF FRANKFURT STOCK EXCHANGE (SOUNDBITE) HEAD OF CAPITAL MARKETS ANALYSIS AT BAADER BANK, ROBERT HALVER, SAYING: "Selling out German industry to China must not happen if, conversely, Germany cannot buy into China. I am an ardent supporter of worldwide globalisation and a market economy. But please, the rules apply to both sides. If the Chinese want to buy from us, they can do so if German companies or European companies can also buy from China. But there seems to be a lack of that. And then you have to be careful that you don't creep into dependency. And German industry in Europe must not allow that to happen." DAX GRAPH
- Embargoed: 23rd November 2022 12:42
- Keywords: COSCO China ELMO Germany Olaf Scholz Robert Habeck
- Location: DORTMUND, BERLIN, FRANKFURT + HAMBURG, GERMANY
- City: DORTMUND, BERLIN, FRANKFURT + HAMBURG, GERMANY
- Country: Germany
- Topics: Europe,Government/Politics
- Reuters ID: LVA002807009112022RP1
- Aspect Ratio: 16:9
- Story Text: The German government on Wednesday (November 9) blocked prospective Chinese investment in two domestic semiconductor producers after the moves raised concerns over national security and the flow of sensitive technological know-how to Beijing.
The government said it had vetoed the takeover of the chip factory of the Dortmund-based company Elmos by Silex, a Swedish company that is a subsidiary of Chinese group Sai Microelectronics.
Berlin also blocked investment in ERS Electronic, which is based in the southern state of Bavaria, government sources told Reuters. A spokesperson for ERS Electronic said there was no plans to sell the company but it had been exploring the option of getting investment from a Chinese private equity firm.
The decisions came at a time of heightened sensitivity around relations between Berlin and Beijing. The government of Chancellor Olaf Scholz, who visited China last week, is trying to balance a push for access to the Chinese market for European companies with addressing security concerns and reducing Germany's trade reliance on China. It has been reviewing its policy towards China especially in the wake of Russia's invasion of Ukraine in February, which exposed Germany's heavy dependence on Russian gas.
Speaking to reporters after the decision, Economy Minister Robert Habeck said China was taking "a deliberate, strategic approach, especially in the area of semiconductors and microchip manufacturing, to influencing both knowledge discovery and production control".
Concerns about the extent of Chinese influence in German businesses came to the forefront last month after Scholz pushed through a decision to allow Chinese shipping giant Cosco to buy a stake in a terminal in the country's largest port, triggering unprecedented protest from within his own governing coalition.
In that case, the cabinet approved a 24.9% stake investment by Cosco, less than an initially planned 35% stake, and it does not give Cosco any say in management or strategic decisions.
(Production: Tanya Wood and Daria Shamonova) - Copyright Holder: REUTERS
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