German Economy Minister Robert Habeck wants to tighten the foreign investment review process with a new law aimed at increasing economic security. This was revealed in a document by the Ministry of Economy seen by Reuters , Sunday (20/8/2023).
The move comes as Berlin urges companies to reduce their dependence on China and as the government examines whether its current regulations are sufficient to encourage this.
It also reflects a broader push in the West to reduce strategic dependence on China, which policymakers call “reducing risk”, amid concerns about China’s increasing expansiveness in the Indo-Pacific region and about possible disruption of wider supply chains.
Germany is sometimes seen as the weak link in Western approaches to China, given its strong business ties with its single largest trading partner. Cosco China’s attempt, for example, to buy a stake in a freight terminal in Hamburg, the country’s largest port, was eventually approved by Berlin.
“Investment reviews have become very important in Germany, Europe and internationally in recent years,” the document says.
As part of the legislation under consideration, investments will be audited where investors gain access to domestic company goods or technology through contractual agreements – not through the acquisition of voting shares – which are already subject to adequate regulatory controls.
In addition, the ministry is also considering examining the safety significance of new factories built in Germany by foreign companies, as well as whether safety-critical research collaboration agreements need to be scrutinized.
Source : CNBC
