Berlin China’s ambitions to expand its influence in Europe through investments in sensitive technology areas and critical infrastructure are to be discussed in the Bundestag’s parliamentary control body responsible for the secret services.
The deputy chairman of the committee, Roderich Kiesewetter (CDU), told the Handelsblatt: “Since such industrial and economic policy decisions increasingly have a safety-related component, I am sure that the parliamentary control committee will deal accordingly.”
The Handelsblatt reported on Thursday that the federal government probably wants to allow the takeover of Elmos’ chip production. The Swedish buyer Silex is a wholly owned subsidiary of the Chinese group Sai Microelectronics.
The Federal Ministry of Economics is currently examining the sale of the factory, and the final decision on approval should be made within the next few weeks. The case caused a stir mainly because the government would apparently defy the advice of the Office for the Protection of the Constitution by approving it. He advised against approving the deal.
Further investments planned by China under examination
According to reports, the Federal Ministry of Economics is currently examining other planned investments that involve acquisition by Chinese companies or their subsidiaries. Government spokesman Steffen Hebestreit said the Federal Chancellery only found out about the planned deal in Dortmund from the media on Thursday. Chancellor Olaf Scholz (SPD) will travel to China next week.
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At the end of 2021, Elmos announced that it would part with its production at the headquarters in Dortmund. Silex is to take over the plant and the supplies for 85 million euros. With the sale, the Elmos company, which mainly produces for the automotive industry, wants to give up its own production and instead buy its chips from contract manufacturers.
The management had declared that otherwise it would no longer be able to utilize its own factory in the future. In contrast to the products previously manufactured by Elmos, buyers from the automotive industry need increasingly smaller structure sizes for the chips, i.e. semiconductors that are produced using more complex processes.
Representatives of the federal government also argue in this way. In this case, there is no risk of safety-relevant know-how being drained. Rather, without the takeover, there is a risk that jobs in Dortmund could be lost. Company circles also say that the Chinese “won’t buy a Tesla here, but a ten-year-old used car”.
In fact, the chips from Elmos do not fall under the certification area of safety-relevant products, explains Frank Bösenberg, semiconductor expert and managing director of the Silicon Saxony industry association. “Upgrading the factory in Dortmund is expensive,” explains Bösenberg. Even with state support, it would hardly have been possible for Elmos to modernize production and thus make it future-proof due to its size.
The German security authorities, on the other hand, argue that, from their point of view, the semiconductor market is not only about the outflow of know-how, but also about production capacities. The Presidents of the Federal Intelligence Service (BND) and the Office for the Protection of the Constitution recently warned of China’s greed.
FDP wants to tighten foreign trade law
The CDU politician Kiesewetter also warns not to ignore the concerns of the intelligence services. Buying up critical infrastructure and key enterprises and production chains is part of China’s strategy, he said. The “system conflict” has already begun, as can be seen from the increasing threats against Taiwan, but also from the Chinese infrastructure initiative of the “New Silk Road” (Belt and Road Initiative, BRI).
China wants to gain control over supply chains in Europe and thus gain a competitive advantage. To this end, the People’s Republic is using knowledge and production capacities “as a weapon to assert interests”.
The possible sale of the chip factory is viewed critically in the traffic light coalition. Green parliamentary group leader Konstantin von Notz demanded that the federal government ban the deal. He tweeted, “This has to stop!”
Gitta Connemann, head of the SME and Economic Union (MIT), also called for the deal to be stopped. “There must be no Putin II. Otherwise it’s: yesterday the Transrapid, today chips, tomorrow our freedom,” Connemann told the Handelsblatt. The CDU politician warned: “The Chinese regime wants to rebuild the world. The targeted purchase of industries serves one goal: acquiring know-how.” The weakening of Germany as a technology and business location is programmed.
The FDP faction deputy Konstantin Kuhle criticized that in many areas neither the supposed turning point nor a new understanding of strategic sovereignty had arrived.
“The chancellor is still not rethinking”
Kuhle therefore considers it urgently necessary to adapt the legal rules that are used to check the entry of foreign investors to the new era. “It’s not about severing all economic relations with China,” he told Handelsblatt. “It’s about slipping blindly into further dependency in central economic sectors.”
The CDU politician Kiesewetter accused Chancellor Scholz of an “unstrategic approach”. “The Chancellor is still not rethinking, but is continuing the failed “change through trade” thinking,” he said. China will continue to be seen primarily as a partner, systemic rivalry and the hybrid approach will be ignored. Kiesewetter warned that the national security strategy, which is currently in the final stages of development, is already in danger of becoming obsolete.
While the Federal Chancellor has so far continued to show a more pro-China policy, the Economics Minister is critical – but probably not complaining in the current Elmos case.
(Photo: AP)
The national security strategy, like the China strategy, is currently being developed under the auspices of the Federal Foreign Office. There are different assessments of the correct way to deal with the People’s Republic in the traffic light. While the majority of the Greens in particular are particularly critical of China, representatives of the SPD are more cautious.
Experts such as Katrin Kamin, Deputy Head of Trade Policy at the Kiel Institute for the World Economy, also believe that the federal government needs to take a more stringent approach: “Where is the national security strategy when you need it?”
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