Chinese companies continue to be on a shopping spree in Europe and Germany in particular. A fresh study shows that takeovers are usually in line with Beijing's new industrial strategy where nothing is left to chance.
When looking to acquire stakes in German companies, Chinese investors more often than not act in line with their government's economic agenda, a survey published by the Bertelsmann Foundation showed Tuesday.
The author of the study, Cora Jungbluth, said it was Beijing's explicit policy to turn the world's second-largest economy from a mere workshop into a global technology leader, with "the acquisition of stakes or complete takeovers of foreign firms being part and parcel of that strategy."
No accidental choice
The analysis of 175 Chinese investments in German companies between 2014 and 2017 revealed that in two-thirds of all cases stakes were secured in the very key industrial sectors that Beijing said it wanted to boost over the next couple of years.
Formally, most of the Chinese companies buying into German firms were in private hands. But the Bertelsmann Foundation's Cora Jungbluth said it was unclear to what extent private entrepreneurs were instructed or guided by Beijing in their foreign acquisitions.
Jungbluth therefore argued that regulators should look harder at the potential long-term impact of Chinese takeovers in Germany, suggesting that authorities should even examine bids for stakes as low as 10-percent — to replace the current policy under which bids are only scrutinized, if they would lead to a Chinese stake in German companies of at least 25 percent.