The German government wants to make takeovers of German companies by foreign investors more difficult, according to the State Secretary for Economic Affairs Matthias Machnig.
Speaking to the newspaper Welt am Sonntage, he said that company takeovers “under market-distorting financial conditions” are increasing and the German government should be given the power to stop strategic takeovers if they want to.
He said that Germany, the EU’s financial powerhouse, has initiated EU legislation with France and Italy in order to be able to monitor foreign direct investment in the EU more closely.
Mr Machnig said: “It is urgently necessary that we get harsher legal measures throughout the EU this year in order to counteract takeover fantasies, as well as draining of technology and know-how effectively”.
The paper cited a study by the Cologne Institute for Economic Research that showed the volume of known Chinese investments in Germany had risen to €12.1 billion in 2017 from around €11 billion the year before and just €100 million seven years ago.
Mr Machnig said: “With its innovative companies, the EU is attractive for many around the world.
“Takeovers are becoming more frequent, often under market-distorting conditions.”
Last year the EU proposed a new framework for screening foreign investment that raises security or public order concerns for the EU.
Under the draft regulation, EU governments will have the power to prohibit Chinese and other foreign investments.
They will also be required to share information on foreign investments with each other and with the European Commission.
Earlier this month French President Emmanuel Macron said that Europe needs a united approach in protecting its strategic assets from foreign takeovers if it is to be respected by China.
(Additional reporting by Monika Pallenberg.)