The federal government has currently issued guarantees amounting to 29.1 billion euros – 11.3 billion euros of which are attributable to China.
(Photo: Bloomberg)
Berlin The FDP is putting the brakes on the Federal Ministry of Economics’ plans to tighten the conditions for state investment guarantees for business abroad. “There is no doubt that many German companies need to reduce their dependence on the Chinese market,” said Reinhard Houben, spokesman for economic policy for the FDP parliamentary group in the Bundestag, in the Handelsblatt. “However, this cannot mean limiting government guarantees for foreign investments altogether,” he warned.
Rather, it must be a matter of finding more attractive regulations for regions of the world in which German companies have so far been less well represented. “It is also clear that there must be grandfathering for guarantees,” says Houben. The federal government should also refrain from controlling investments on foreign soil, he warned.
According to statements by more than half a dozen high-ranking members of the government, the officials of Economics Minister Robert Habeck (Greens) want to significantly tighten the rules for state guarantees for German companies investing abroad. The background is the increasing dependence of German companies on the Chinese market at a time of increasing geopolitical tensions.
So far it has worked like this: companies invest abroad and are reimbursed proportionately by the state if a guarantee has been issued beforehand. The Ministry of Economic Affairs now wants to generally limit these guarantees.
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Specifically, the officials in the Federal Ministry of Economics are considering setting binding upper limits for investment guarantees. The consideration: Such upper limits would prevent the economic dependence of individual sectors and companies on one country from becoming too great.
>> Read here: Federal government initiates change of course in China policy
The economy warned of the negative consequences for German companies. “A tightening of the conditions for investment guarantees and Hermes guarantees would weaken the German economy in terms of its position in global competition,” said Jens Hildebrandt, executive board member of the German Chamber of Commerce in China (AHK), the Handelsblatt.
With export guarantees, or Hermes guarantees, the federal government secures exports to countries with a higher risk on request. Investment projects by German companies abroad are secured with investment guarantees
The opposition fundamentally supported the push to put the foreign trade instruments to the test – albeit under conditions. “It is right that we are vigilant with regard to China,” said the economic policy spokeswoman for the CDU/CSU parliamentary group, Julia Klöckner, to the Handelsblatt. “However, it is also clear that many German companies are active in the Chinese market,” says Klöckner.
In view of the current economic situation, they also need planning security. “If adjustments are made, they must be practicable and give the company a planning horizon,” demanded Klöckner. Ultimately, it is also about trust and reliability in Germany as an export location.
The federal government has currently issued guarantees amounting to 29.1 billion euros – 11.3 billion euros of which are attributable to China. For months now, the federal government has not only been sending warning words, but also clear signals to German companies that are heavily dependent on China.
Only recently, Federal Economics Minister Habeck refused to extend federal guarantees for Volkswagen for human rights reasons. The automaker has a plant with its Chinese joint venture partner SAIC in the western Chinese province of Xinjiang, where Beijing has been accused of serious human rights abuses.
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