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Berlin pushes back against China’s business plans

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As a result of its trade war with the US, China could begin stepping up its shopping spree in Germany aimed at acquiring the country’s fabled technological know-how, despite growing resistance to Beijing’s investment drive in Europe’s biggest economy.


“The headwinds have increased [in Europe],” said Yi Sun, a China analyst with the professional services group Ernst & Young.


This is especially the case among high-tech companies and utilities where there are more “political concerns and worries about a sell-out of know-how,” said Yi.


German machine tool manufacturer Leifeld announced last week that China’s Yantai Taihai had abandoned its bid to acquire the group, hours before Berlin was tipped to veto the deal on strategic grounds.


A civilian nuclear power parts supplier, Yantai Taihai’s decision came less than a week after Berlin blocked China’s entry into the German electricity sector on the grounds of national security.


And Chinese auto parts group Ningbo Jifeng is hoping that its long-running battle to acquire a majority stake in Bavarian-based auto interior maker Grammer will finally come to an end on Monday night when a majority of shareholders sign off on its 700 million euro ($809million) takeover bid.


But while the Berlin authorities have already given the green light tothe takeover, saying they did not have any issues with the deal, the move risks provoking fresh anger in Germany about China’s inroads into the nation’s key industrial sectors.


In recent years, Chinese investors have secured stakes in German firms as varied as machinery groups, solar and alternative energy,material handling, building equipment and piano manufacturing.


The investment offensive forms part of Beijing’s drive to turn its own products into global brands and transform the country into a major industrial giant by the nation’s 100th birthday in 2049.


Yi estimated that Chinese companies have splurged about 10 billion euros in Germany since January — out of a total of about 15 billion euros spent in Europe.


In February, Chinese automaker Geely became the biggest stakeholder in Daimler — the manufacturer of luxury Mercedes-Benz cars — after its purchase of a 7.3 billion euro stake in the Stuttgart-based firm.


The issue of Chinese investment could complicate any moves by Beijing and Berlin to forge a united front against the White House as US President Donald Trump attempts to reset the US’s global trade relations under his “America First” protectionist plan, which now includes an escalating trade war with China.


However, the tensions with the US could again “lead to a greater willingness in Europe to get Chinese investors on board,” Yi said.


This is particularly the case as several of the German companies targeted by Chinese investors are highly specialist family-run firms with long corporate histories that have struggled in recent years in the face of rapid market changes and moderate economic growth in Europe. — dpa


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