Germany issues warning against Chinese acquisition strategy

Germany is urging European companies to band together and confront the heightened efforts by China to gain influence and procure technology by acquiring foreign companies.

Berlin has cautioned about the acquisition efforts by Chinese companies, saying that they were trying to gain political influence in Europe by acquiring infrastructure projects, Chinascope cited Deutsche Welle as reporting.

As much as 30 per cent of 80 acquisition proposals in the year 2017 were discovered to be from Chinese companies, Thomas Bareiß, the Secretary of the Committee on Economic Affairs and Energy said.

Bareiß further stated that while Germany remains to be an investor-friendly nation, they needed to be prudent about the take-over efforts of Chinese companies. He also issued a rallying cry for all Eastern European nations to deal with the issue together.

"We can't be too naive and too reckless. The competition in the international community requires a tough position. We are willing to face it, but it must be under fair and equal rules of the game. We are still far from it because the investment environment around the world is very different," Bareiß said.

A proposition to acquire a 20 per cent stake in the German transmission system operator - 50Hertz - by the government-owned State Grid Corporation of China was recently turned down. The deal was later given to KfW, a German development bank after the intervention of the German government.

Meanwhile, Bareiß also acknowledged that German companies needed to be stronger and that co-operation among European companies such as Siemens and Alstom would be more meaningful.

The China National Automobile Group became the world's largest railway vehicle manufacturer three years ago through mergers and acquisitions, with Siemens and Alstom, earlier this year, deciding to join hands to take on the competition from the China National Automobile Group.