Federal government discusses tightening of investment guarantees

Berlin The Federal Ministry of Economics is planning a change of course in its China policy. According to statements by more than half a dozen high-ranking members of the government to the Handelsblatt, the officials of Economics Minister Robert Habeck want to significantly tighten the rules for state guarantees for German companies investing abroad. “We have to do something to stop China’s cluster risk from building up,” said a senior official at the ministry.

The reason for the change of course is the increasing dependence of German companies on the Chinese market at a time of increasing geopolitical tensions. The federal government is working intensively on the scenario of a military conflict in Taiwan, which could lead to severe sanctions, which in turn would affect many German companies.

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.