EU Starts to Panic at Rate of Chinese Acquisitions

The European Union is busy drafting a law which aims to stop Chinese companies from buying up European firms and technology, deputy German Finance Minister Matthias Machnig has announced.

As reported by German media, Machnig said that the draft EU law “has found support in European capitals” because the continent “urgently needed a legislative tool” to examine strategic takeovers and stake-holding by foreign states and, if necessary, powers to intervene.

The initiative has come from Germany, France and Italy, and has European Commission approval. It is now subject to consultations within the EU Council of Ministers and the European Parliament, Machnig added.

“It is urgently necessary that within this year we are handed a sharper legislative instrument to resist takeover fantasies or outflows of technology and know-how,” he was quoted as saying.

“Firm takeovers are rising, unfortunately often under market-distorting financial conditions.”

Known Chinese investments in Germany had jumped from €100 million ($124 million) seven years ago to €12.1 billion last year, the Cologne-based Institute for Economic Research (IW) told Welt am Sonntag.

“In most cases less than 50 percent of the sum of transactions of Chinese firms in Germany actually became public,” said the IW’s Christian Rusche.

Overall, foreign buyers took over a record number of 873 German companies last year.

According to Berlin-based Mercator Institute for China Studies, foreign direct investment (FDI) in Germany started soaring in 2015 and hit a record of 11 billion euros ($12.6 billion) of completed deals last year. This makes Germany the largest recipient of Chinese FDI in Europe.

Chinese appliance manufacturer Midea’s purchase of German robot manufacturer Kuka for 4.4 billion euros was by far the largest transaction last year. The proposed legislation is a direct response to the Kuka takeover.

In 2017, the German government cancelled its initial approval of a Chinese takeover of semiconductor equipment maker Aixtron, a deal that was later shut down by the US government.

In early 2016, Beijing Enterprises acquired waste incineration and power generation company EEW Energy for 1.4 billion euros.

The acquisition of Munich-based industrial machinery maker KraussMaffei Group for 925 million euros by China National Chemical Corporation was the fourth-largest Chinese investment in Germany in 2016.

In October 2016, China’ sovereign wealth fund CIC invested one billion euros in German property group BGP. The transaction was the first major Chinese investment in German homes. According to Reuters, CIC and its co-investors beat out German property groups Vonovia and Deutsche Wohnen in the auction for BGP.

Putzmeister, a 59-year-old maker of pumps for concrete, was bought by its Chinese competitor Sany for 360 million euros in 2012.

The sudden Chinese wealth is the direct result of the deindustrialisation policies pursued by Western governments ever since the Reagan-Thatcher era, when it was claimed that outsourcing European and American manufacturing would lower the cost of goods and First World nations could transition to so-called “service industries”—which mainly now consist of money shuffling in the large financial centers and take-away food industries for the “workers.”

This principle ignored the basic economic reality that wealth creation only comes about through the physical manufacture of goods, and nothing else. The decision to outsource manufacturing to China has effectively gutted the west, and now, with the wealth so transferred to the Far East, the Chinese are attempting to buy up what is left of European industry.

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  1. Put it this way. The EU has economically stagnated these past 30/40 years, not least because of the highly deflationary policies forced by the Maastricht ‘convergence criteria’.
    On the other hand in those 40 years, China has grown and grown and grown.
    Now, simple, basic economics tells us that this imbalance MUST have an effect. And this is it.

    The EU is literally killing Europe.

  2. What a great quote! “Wealth creation only comes about through the physical manufacture of goods, and nothing else.”

    We must be wary of blaming China for everything, though, because Indian Subcontinentals have proven to have an even more voracious appetite for parasitizing the West, and are fond of pointing the finger at their old enemy China, in order to deflect blame away from themselves. The nauseating Indian destruction of British Steel is a good example: (((Marxist Subversives))) infesting the British government allowed an Indian billionaire to buy British Steel, steal its technology to build replica factories in India, and once the replicas were up and running, staffed by Indians, he announced he was cutting all UK production, and deceitfully blamed “cheap Chinese imports”.

  3. “reality that wealth creation only comes about through the physical manufacture of goods, and nothing else.”

    ((Finance Capitalism)) conflates wealth with debt instruments and financial paper. This form of capitalism was invented by our friends in Amsterdamn beginning in 1450, with the advent of stock market capital and the first stock owned corporations. This then led to the first debt spreading corporation (bank) to host a country: Bank of England in 1694.

    Here is the economic equation that our friends don’t want you to know – it is important that a host population remains as dupes.

    Earth+Labor = Tool. Earth+Labor+Tool = Machine . Earth+Labor+Machine = Goods. Goods become Prices. Goods become a monetary price with advent of money.

    Goods fetch money when sold, and money is thrown backward toward Labor. The Earth is free, a gift of god.
    The equation always reduces to its root elements: Labor + Earth, which are the two main factors in wealth production.

    Finance also want’s to grab the earth, to monopolize it, to then drive prices high, to then take unearned income.

    Starting in 80’s Reagan/Thatcher convinced world that money was wealth and neo-liberal finance capitalism was the “new economics.” In the same deluded way Spain convinced themselves that precious metal money was wealth in the new world. No civilization can survive when they are in a bubble of false reality. Money’s true nature is law, and should flux in proportion to goods and services production.

    Human’s are entropic pumps of the earth’s bounty, and money is only a means for organizing and distributing human labor.

  4. Well according to remainers the EU will put up ‘trade barriers’ so the UK can’t do business with them after brexit, so it should be a piece of cake to do the same with China, right? Not that that will stop the Chinese from simply copying whatever the want to make anyway…

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