Germany wants tighter foreign investment controls amid China ‘de-risking’

BERLIN – German Economy Minister Robert Habeck wants to strengthen the foreign investment review process with a new law that would aim to boost economic security, according to a ministry document seen by Reuters on Sunday.

The effort comes as Berlin urges businesses to reduce their reliance on China and the government examines whether its current set of regulations is sufficient to encourage this.

It also reflects a broader push by the West to reduce strategic reliance on China – which policymakers have dubbed “risk reduction” – amid concerns about China’s growing expansion. in the Indo-Pacific region and possible wider supply chain disruptions.

Germany has sometimes been seen as a weak link in the Western approach to China, given the close trade ties with its biggest trading partner. An effort by China’s Cosco, for example, to buy a stake in a cargo terminal in Hamburg, the country’s largest port, was eventually approved by Berlin.

“Investment reviews have grown enormously in importance in Germany, Europe and internationally in recent years,” the document states.

Under the legislation under consideration, investments would be audited in which an investor accesses the goods or technology of a national company through contractual agreements, rather than through the acquisition of shares with right of voting – already subject to sufficient regulatory scrutiny.

In addition, the ministry also plans to check the safety significance of new factories built in Germany by foreign companies, as well as whether cooperation agreements on safety-critical research should be reviewed.

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