Matthias Machnig, Germany’s deputy economy minister, speaks during the Asia-Pacific Conference of German Business in Hong Kong, China (Photographer: Anthony Kwan/Bloomberg)  

Germany Denies Protectionism as Chinese Takeovers Are Probed

(Bloomberg) -- A German deputy economy minister said the country isn’t drifting toward protectionism, responding to Chinese government calls for Germany to be open to foreign investment.

Germany remains “one of the most open economies in the world,” even as it scrutinizes Chinese takeovers in some technology sectors, Matthias Machnig said in a Bloomberg Television interview from Hong Kong on Friday. He rejected the notion that Chancellor Angela Merkel’s government is engaging in "a kind of new protectionism."

"This is not true," said Machnig, whose ministry reviews foreign private investment in Germany. "We had, let’s say, 300 companies and mergers and acquisitions from Chinese companies in the last year. Two or three are now discussed because of security reasons or military questions."

Germany last month opened reviews of Chinese takeover offers for semiconductor supplier Aixtron SE and the general lamps division of Osram Licht AG. Economy Minister Sigmar Gabriel earlier this year voiced opposition to a purchase of German robot maker Kuka AG by China’s Midea Group Co.

Commenting on the Aixtron case, Commerce Ministry spokesman Shen Danyang said Wednesday that China hopes Germany can treat Chinese companies’ investment with a rational, objective attitude. China wants Germany to create a good environment for Chinese investments, Shen said in Beijing.

Chinese companies have announced or completed acquisitions in Germany valued at a record 11.3 billion euros ($12.5 billion) this year, almost eight times the level of 2015, according to data compiled by Bloomberg.

Gabriel was in China this week for talks with government officials. Machnig said the German team addressed imbalances in the trade relationship between China and the European Union, including "huge overcapacities" in areas such as steel production.