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Germany ‘watchful’ of Chinese investment in Daimler

Daimler confirmed Friday that Li bought a 9.69-percent stake in the Stuttgart firm worth around 7.2 billion euros ($8.9 billion), making him its weightiest investor./AFP

Frankfurt am MainGermany, Feb 26 – Germany will be “especially watchful” over a new major investor in Mercedes-Benz maker Daimler, a minister said Monday, in the latest sign of European disquiet over Chinese influence over business.

“We must keep an especially watchful eye” on auto billionaire Li Shufu’s investment, Economy Minister Brigitte Zypries told the Stuttgarter Zeitung.

Daimler confirmed Friday that Li bought a 9.69-percent stake in the Stuttgart firm worth around 7.2 billion euros ($8.9 billion), making him its weightiest investor.

Industry analysts suggest having a new, more active major investor may irk executives at first, but could ultimately invigorate Daimler’s transition towards more battery-electric and hybrid cars and internet-connected driving.

But worker representatives on Daimler’s board said they too would scrutinise Li’s plans, looking to defend factory sites and jobs in Germany.

“We expect of Li that he should have a long-term interest in Daimler and want to develop our company further, in cooperation with the workers,” they said in a statement.

Some politicians see the investment in a broader context of Chinese cash winding around the sinews of the European economy.

The distrust is all the greater as EU nations are more open to investment from abroad than Beijing allows on its territory.

Germany is “an open economy that welcomes investments, as long as they happen in line with the market,” Zypries said in an interview with business daily Handelsblatt.

Nevertheless, Germany’s openness should “not be used as a gateway for other states’ industrial policy interests,” she warned.

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Just last week, Handelsblatt reported Berlin hopes to block State Grid Company of China (SGCC) from investing in 50Hertz, which operates the electricity grid in Germany’s northeast.

Ministers agreed last year to expand government powers to scrutinise takeover bids from abroad, especially in sectors affecting critical infrastructure, and to extend the range of deals eligible for official probes.

The move followed the 2016 Chinese takeover of industrial robotics firm Kuka and US-based Tesla Motors’ buying-up of factory automation specialist Grohmann Engineering.

That same year also saw Washington block a Chinese acquisition bid for German microchip maker Aixtron, warning its products could have military applications.

“I have no objections to the fact that China wants to trade… and to invest,” Chancellor Angela Merkel told reporters last week in response to a question about Beijing’s influence in the Western Balkans — a clutch of nations in the EU’s backyard eyed as likely future members of the bloc.

“We are committed to free trade,” she added, but stressed that “it must be reciprocal” and that openness must come “not just from one side but from all sides”.

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