China Economic Review

Germany moves to protect key industries from Chinese investment

The German government has ruled to ban the purchase of a German energy company by a potential Chinese buyer, only a few days after blocking a similar deal over national security concerns.

The nation’s economics ministry gave directions for the state-run development bank KfW to buy a 20% stake in electricity provider 50Hertz, according to the Financial Times, in attempt to shield it from State Grid Corp of China, the prospective investor.

“The government has a major interest in protecting critical energy infrastructure, on grounds of national security,” the ministry said. “Ordinary people and businesses expect a reliable energy supply.”

Last Thursday the government also announced that the sale of Leifeld Metal Spinning AG to a Chinese investor had been blocked following a review that found the deal to be a “risk to public order and safety.”

A government official added that the coalition government led by Angela Merkel wants to keep the machine-building company’s technology, which is often used to build rockets and nuclear facilities, under national control.