Chinese ownership and control over German companies MAPPED | World | New
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Relations between China and Germany over the years have evolved. During her tenure, Chancellor Angela Merkel welcomed the new and improved relations with Beijing, offering President Xi Jinping a developed country in Europe in which to invest. In recent months, Merkel has distanced herself from Germany and China in light of violations of the rights of Uyghur Muslims in the country’s northwestern Xinjiang province.
Given the wealth of Chinese interests in Germany, this might be too little too late, however.
As she prepares to step down as German Chancellor, her Christian Democratic Union (CDU) party candidate Armin Laschet is expected to forge even closer ties.
In his first major foreign policy speech last week, he vowed to maintain the bond that has seen Germany account for half of all EU exports to China.
He also pledged to strengthen a number of other policies, including the Comprehensive Agreement on Investment (CAI), a specific EU-China deal controversially reached in the dying days of 2020.
Chinese experts warn that such deals prove that the country is moving from a purely economic power to a political one.
This includes large investments and buyouts of companies, some of which are linked to public companies.
Germany is one of the best examples where the Chinese market has flooded with takeovers.
The list goes on, but Express.co.uk has rounded up some of the biggest buyouts and failures that present potential threats to German and European security and industry.
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HNA Group Co Ltd is a Chinese conglomerate based in Haikou, Hainan, China.
In 2017, the group acquired a majority stake of 82.5%, the first purchase of an overseas airport by HNA.
At the time, the China Daily reported, “This is also the latest in a succession of acquisitions the company has made of various international assets, to accelerate its global expansion.”
The group is not state-owned, but rather owned by a handful of individuals and companies based primarily in China, although billionaire philanthropist George Soros once had a stake, but has since. sold.
Daimler, automobile manufacturer
Geely owns a 9.69% stake in Daimler, an automaker worth $ 9 billion (£ 6.4 billion).
The automaker is owned by billionaire Chinese business tycoon Li Shufu and was the country’s first non-public automaker, launched in 1997.
Kuka, robot maker
Midea owns 95% of Kuka, a manufacturer of industrial robots.
The Chinese company – listed on the stock exchange – bought a 25% stake in the German robotics maker in 2016.
The following year he saw the potential of owning a Europe-based and world-renowned robotics expert designed to help accelerate automated production even further and secured a 95% stake.
Kuka’s estimated value at the time of the share acquisition was 4.6 billion euros (£ 3.9 billion).
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Germany: The country has had a high volume of Chinese commercial interests over the past decade
Aixtron SE, failed
The Fujian Grand Chip Investment Fund’s takeover of Aixtron SE – a chip-based equipment maker – failed after US President Barack Obama blocked the deal.
The German company was ready to secure the deal in 2016, but was thwarted at the last minute amid growing concerns and objections in Germany and the United States of China to buy out companies with strategic technology overseas. without allowing reciprocal transactions at home.
The € 670million (£ 580million) takeover bid was already in doubt after the German government withdrew its approval, ostensibly to the US tender.
Mr. Obama previously blocked Fujian from buying US Aixtron following an assessment by the Committee on Foreign Investments in the United States (CFIUS), an interagency task force under the Treasury Department.
In 2016, Chinese chemicals company ChemChina bought machine maker KraussMaffei Group for around $ 1 billion (£ 707 billion).
It was the largest Chinese acquisition ever of a German company.
At the time, Reuters noted: “The deal is the latest example in recent years of Chinese companies with deep pockets seeking to acquire the technological expertise, distribution networks and branding of Western companies, often built over several decades. “
It came as the Chinese currency weakened and the country encouraged companies to move their investments abroad in order to encourage more transactions.
Cotesa, aerospace suppliers
In 2018, China’s Advanced Technology & Materials (AT&M) – whose main shareholder is a state-owned company – took over German aerospace supplier Cotesa.
On hearing about the deal, Germany’s Economy Ministry launched a review after tightening its rules on foreign company buyouts, fearing that important technology and know-how could be transferred to foreign countries.
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Leifeld Metal Spinning, failed
In the same year, the Chinese takeover by Yantai Taihai of Leifeld Metal Spinning was blocked by the German government.
A government source said: “The cabinet decided today to grant a veto authorization.
“This authorization makes it possible to veto the purchase of a domestic company by a foreign company for security reasons.”
IMST, communications technology, failed
At the end of 2020, just days before the EU concluded an investment deal with China, Germany blocked the takeover of satellite and radar technology company IMST by a subsidiary of the controlled missile maker. by the state China Aerospace and Industry Group (CASIC).
The German government, as in previous cases, said this was due to national security concerns.
Berlin sees IMST as an important supplier of satellite, radar and radio communication technologies.
His knowledge of these technologies is crucial for Germany and Europe.
On this occasion, Ms Merkel’s cabinet was concerned about the unfair competition caused by state-backed companies and the restrictions on market access.
China-Germany MAPPED: mapping of Chinese companies’ holdings in German companies
In the 2017 research journal, “ Chinese Investment in Europe: Corporate Strategies and Labor 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 a foreign direct investment (FDI) country to an FDI exporting country.
Since the turn of the century, it has started investing more in countries around the world, especially in Europe, compared to the other way around.
The authors note how China appears to have used investments in companies in countries like Germany to avoid EU tariffs on products.
They wrote: “Bypassing trade barriers: Chinese companies are also investing in Germany and Europe in order to circumvent EU tariffs on their products.
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“Fifty-six of the 73 current EU anti-dumping measures concern Chinese imports.
“So far, higher tariffs on imports of steel, solar modules and other products have been possible because the EU does not recognize China as a market economy.
“It was not until last May that China’s request to be recognized 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 first target sectors in Germany.
“Chinese investors either took a stake in German solar farms or took them over.”