Germany, France, Italy Push Back Against Chinese Buyouts

22nd August 2017

The three countries want more power to stop China acquiring European companies.

The governments of Germany, France and Italy have sent a policy paper to the European Commission proposing that political factors be taken into account when looking at foreign acquisitions of European companies. If accepted by the Commission, this move would give European countries more leverage to reject acquisitions by Chinese investors.

The statement comes after a recent surge of Chinese investment in strategic European sectors, such as German robotics company Kuka. Germany, France and Italy argue that the takeovers are often motivated not by economic or technological concerns but by political ones, with China seeking to takeover companies in strategic sectors to bolster its bargaining power vis-a-vis the EU.

Commission President Jean-Claude Juncker is widely expected to announce new measures allowing the Commission to better manage foreign investments in Europe. These could include a vetting process which would determine whether a buyout is in line with free market principles. This could lead to the blocking of takeovers which are heavily subsidised by the Chinese government.

China has expressed concern about moves by the EU or member states to have more influence over foreign acquisitions.

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