Chancellor Olaf Scholz’s government blocked the sale of the semiconductor company to a Chinese-owned company on Wednesday, as Germany seeks to strengthen protections for domestic technology and reduce dependence on China. .
Robert Habeck, Germany’s Economy Minister, said that the government had also blocked a private investment in a German company that produces critical infrastructure, which he said could not be identified because of secret arrangements. .
The moves took place a few days later Mr. Scholz returned from a trip to Beijing, where he met with President Xi Jinping for a discussion focusing on Russia’s ongoing war in Ukraine, as well as economic relations between the two countries. China is Germany’s largest trading partner, exchanging goods worth more than 245 billion euros (about $246 billion) last year.
But German officials are increasingly wary of over-reliance on China. Over a million jobs in Germany depends directly on trade with China and many other things indirectly, while Almost half of German manufacturing firms that rely on China for part of their supply chains.
There is also growing frustration in Berlin over Beijing’s refusal to grant foreign companies the same treatment in China that Chinese companies enjoy in Germany and elsewhere in Europe. Especially in terms of critical infrastructure and technology, there are growing concerns about giving Beijing’s state-owned companies too much access.
“Especially in the semiconductor sector, it is important for us to protect the technological and economic sovereignty of Germany and Europe,” Habeck told reporters on Wednesday. “Of course, Germany is and will remain an open investment destination, but we are not naive either.”
Mr. Habeck named Elmos Semiconductor, based in Dortmund, as one of the companies denied approval for foreign investment.
Elmos announced nearly a year ago that it planned to move its wafer manufacturing facility, which produces chips primarily used in the automotive industry, into a separate entity to be acquired by Silex Microsystems, a Swedish company wholly owned by a Chinese company. .
From the outset, the €85 million deal had to be approved by the government because it involved a foreign company buying a German company.
On Wednesday, Elmos released a statement saying it regrets the government’s decision and that the deal will help boost chip production in Germany. It said it would “analyze the decision” and “determine whether to take legal action.”
Mr. Habeck declined to name the second company blocked from selling, noting that the company’s internal confidentiality agreements prevented him from doing so. But the German business daily Handelsblatt reported that they are related to ERS Electronic, a company focused on cooling technology based in Bavaria.
An ERS spokesman said the company had discussed “an investment by a Chinese private equity company,” but added that it had not received any communication from the government about the decision.
Last week, before leaving for Beijing, Mr. Scholz rejected offers from six of his ministries and also from intelligence chiefs at home and abroad. to allow Coscoa Chinese state-owned shipping company, to buy a stake of up to 25% in a container handling port in Hamburg, Germany’s most important port.
Cosco initially sought to buy back a 35% stake, but that was scaled back after political and public outcry over security concerns.
Mr. Scholz traveled to China with a delegation of 12 German business leaders, even as he sought to encourage German companies to diversify their commercial ties in Asia. Both he and Mr. Habeck will travel to Singapore next week for a broader Asian business conference.
