SPD politicians call for defense funds against foreign takeovers

Berlin Leading SPD politicians are calling for state entry to prevent the influence of Chinese investors. “We have to better protect our critical infrastructure and crucial sectors and make them future-proof,” said Cansel Kiziltepe, head of the SPD employee wing and state secretary in the Federal Ministry of Construction, the Handelsblatt. SPD federal vice Thomas Kutschaty proposes a “transformation fund” for this purpose.

The involvement of Chinese investors in critical economic sectors in Germany is increasingly coming into focus. The secret services warn. In particular, there is concern that in the event of an economic war following China’s attack on Taiwan, the influence on the German economy could be used as a strategic weapon.

The federal government can prohibit investments from other EU countries under certain conditions. Berlin has recently stopped the sale of two semiconductor companies, and the entry into a container terminal in the port of Hamburg was curtailed.

Another 42 investment reviews in the Federal Ministry of Economics are still ongoing. Ministry circles report that most buyers come from China: 15 times. There is agreement in the governing coalition that the criteria for examining these investments should be tightened. But is that enough?

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Not from the point of view of SPD politicians like Kiziltepe or Kuchaty. They see state entry as the sharper sword to ward off Chinese influence on the one hand and to offer companies an alternative perspective on the other hand, which are prohibited from entering a Chinese investor.

Similar approach already by Peter Altmaier

In the future, the state will “increasingly support companies directly and also have to step in temporarily,” says Kiziltepe. Appropriate aid should be provided from the Economic Stabilization Fund (WSF) created at the beginning of the corona pandemic – but subject to certain conditions. “Anyone who takes advantage of state aid must show transformation paths, preserve jobs and forego dividends and bonuses,” she explained.

>>Read here: How the traffic light wants to shield the critical infrastructure

Kutschaty also sees a need for action: “The state must be active when it comes to keeping future technologies in the state and building them up again,” said the state chairman of the North Rhine-Westphalian SPD. In order to prevent new dependencies, the federal, state and local governments would have to take their own financial means – “especially in the case of future-oriented companies that are threatened with takeovers from other economic areas”. This is necessary “especially with a view to jobs”, adds the co-head of the SPD-Left, Sebastian Roloff.

There have been such considerations before. In his industrial strategy for 2019, former Economics Minister Peter Altmaier (CDU) proposed using a fund to prevent hostile takeovers in particularly precarious cases.

However, a more active role for the state had met with sharp criticism from business associations. As a result, Altmaier significantly weakened the wording on a state investment fund. The government buying shares in private companies should remain the absolute exception.

Federal government stops further Chinese takeovers

At the time, the industrial strategy was shaped by the idea of ​​preventing a new “Kuka case”: the robot manufacturer was taken over by a Chinese group in 2016. Attempts to fend off the takeover had failed – also because the foreign trade law at the time had not permitted this.

Two years later, a relevant case arose for the first time in which the federal government actually fended off an investor from the Asian superpower by getting involved: In 2018, the Chinese SGCC grabbed a 20 percent stake in the German electricity grid operator 50Hertz twice.

In the first attempt, the federal government succeeded in persuading the Belgian 50Hertz majority owner Elia to make use of his right of first refusal. When selling the second 20 percent package, the purchase by SGCC could only be prevented by KfW stepping in as the buyer.

The state development bank still holds the stake to this day. Demands from 2018 that KfW should not hold the stake permanently have meanwhile turned into the opposite. The option that the federal government could become even more involved with the four electricity network operators is discussed again and again.

Green group leader speaks out against it

Before they can implement a takeover fund, the SPD politicians still have a lot of convincing to do. In most of the responsible federal ministries, such a fund is viewed critically, according to government circles.

“I don’t think an equity fund or the like is the right instrument to protect against Chinese foreign investments,” explains Green Party leader Katharina Dröge, for example. Only in absolute exceptional cases should the state itself become active through participation.

“But you don’t need an extra fund for that,” Dröge told Handelsblatt. This does not make sense from a regulatory point of view, it restricts competition. Better investment reviews are “the much sharper sword”. Proponents also call for an addition to the investment controls.

>> Read here: Habeck stops Chinese takeover of Dortmund chip factory

Because the rejection of an investor who is undesirable from the government’s perspective can have critical consequences for the takeover target. According to the mayor of Dortmund, Thomas Westphal (SPD), 225 jobs are at risk in the case of the recently prohibited sale of the Elmos chip factory in Dortmund to China.

“We have to get out of the process of individual decisions very quickly.” Thomas Westphal, Lord Mayor of Dortmund

The CDU MEP and Vice-Chairman of the Christian Democratic Workers’ Union (CDA), Dennis Radtke, says: “Should the fears of the mayor of Dortmund be correct, the federal government must try to find a new investor and, in case of doubt, ensure how long it takes to get there.” can be bridged.”

Ironically, Dortmund’s mayor Westphal himself has a completely different suggestion: he wants to go the opposite way in reforming the investment reviews. “We have to get out of the process of individual decisions very quickly,” said the Social Democrat.

“They are absolutely susceptible to irrelevant motivations, Elmos made that clear.” Westphal speaks of a “chain of prohibitions and compensation payments” and “blatant dirigisme”.

However, whether a local mayor can actually rebel against his party’s efforts at the federal level and be able to stop either stricter investment controls or a takeover fund is at least questionable in the SPD.

More: How the traffic light wants to shield the critical infrastructure

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