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Chinese official defends Chinese takeovers of German firms: newspaper

Friday, November 25, 2016 - 06:38

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Chinese Vice Premier Liu Yandong on Thursday defended efforts by Chinese companies to take stakes in German companies, saying such deals benefited both sides.

[BERLIN] Chinese Vice Premier Liu Yandong on Thursday defended efforts by Chinese companies to take stakes in German companies, saying such deals benefitted both sides.

"Concerns about a 'sell-off of Germany' are completely unfounded," Ms Liu told Germany's Handelsblatt newspaper days after news that US authorities had recommended blocking the sale of German chip equipment maker Aixtron by China's Fujian Grand Chip Investment Fund (FGC).

Ms Liu said China would continue to encourage its firms to invest in Germany despite the US decision and a move earlier this month by Germany Economy Minister Sigmal Gabriel to withdraw approval of the 670-million-euro takeover deal.

The Chinese official met on Thursday in Hamburg with German Foreign Minister Frank-Walter Steinmeier, who said Germany would continue to welcome Chinese investments, but that such deal could not be a 'one-way street.'

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Mr Gabriel made a similar point during a visit to China earlier his month, urging the Chinese government to reduce barriers for German firms wanting to do business there.

So far this year, Chinese investors have agreed 47 deals to buy German targets, worth a total of 10.3 billion euros, according to Thomson Reuters data, up from 29 deals worth 263 million euros in 2015.

Ms Liu told the newspaper that Chinese firms accounted for less than one per cent of foreign investments in Germany, but German firms had invested considerably more in China.

"If Chinese-German investments become more balanced and frequent in both directions, then the economic cooperation of both countries will lead to more advantages," she said.

Ms Liu told the newspaper that Chinese investments in German firms had helped stabilise those businesses, while opening up new markets and securing employment.

Aixtron this week said it was in close touch with US and German authorities about answering their concerns about the company's takeover by Fujian.

The company is seen as having a bleak future as a standalone company as it struggles with overcapacity in a market dominated by Chinese buyers.

Ms Liu also warned the West against imposing anti-dumping duties against Chinese steel.

"The improper use of measures aimed at supporting business and trade, such as anti-dumping duties, would not be at all helpful for solving overcapacity in the world steel industry," the paper quoted her as saying. "Blaming the problems currently faced by European and US steel exporters on overcapacity in the Chinese steel industry and its export subsidies is completely baseless and unfair," she said.

REUTERS

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