Europe should temporarily ban Chinese takeovers, says Germany’s Weber

Brandenburg Gate, Berlin, Germany. Photo: Marius Serban/unsplash

The European Union should impose a temporary ban on Chinese takeovers of companies that are currently undervalued or have business problems because of the coronavirus crisis, the leader of the bloc’s largest political alliance said on Sunday.

Manfred Weber, a senior German conservative and head of the centre-right EPP grouping in the EU Parliament, told Germany’s Welt am Sonntag newspaper that he was in favour of declaring a twelve-month ban for Chinese investors who want to buy European firms.

“We have to see that Chinese companies, partly with the support of state funds, are increasingly trying to buy up European companies that are cheap to acquire or that got into economic difficulties due to the coronavirus crisis,” he said.

The European Union therefore should react in a coordinated way and put an end to the “Chinese shopping tour” by imposing a twelve-month moratorium on sales of European companies until the coronavirus crisis is hopefully over, Weber said.

“We have to protect ourselves,” he added.

China and the EU launched negotiations on a comprehensive investment agreement in 2013, and have held numerous rounds of talks since then. Sticking points have included reciprocal market access and a level playing field.

Chinese and EU leaders are slated to meet at a special summit in September, though the coronavirus pandemic has cast some doubt on whether the meeting can go ahead as planned.

“China will be our biggest competitor in the future, in economic, social and political terms,” Weber said. “I view China as the strategic competitor for Europe, that represents an authoritarian model of society, that wants to expand its power and replace the United States as a leading power.”

Europe should take China seriously and show respect for the country as a world power, “but above all we have to be vigilant,” Weber said.

The German government agreed last month to tighten rules to protect domestic firms from unwanted takeovers by investors from non-European Union countries.

The move comes at a time when Europe‘s biggest economy, and the EU as a whole, are reconsidering relations with China in the face of increased investment in critical sectors by Chinese state-owned enterprises.

German officials have described the Chinese takeover in 2016 of Bavarian robotics firm Kuka as a wake-up call that underlined the need to shield strategic parts of the economy.

An attempt by China’s State Grid in 2018 to buy a stake in power grid operator 50Hertz also focused German minds. After Berlin failed to find an alternative private investor in Europe, German state-owned bank KfW stepped in to keep the Chinese out.

Reuters

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

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Following vacancies can be applied for (only in Singapore).   

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  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.