Nation hits back at new EU 'protectionist' law

Updated 2018-01-30 09:55:01

Efforts to curb Chinese investment unfair: experts

Chinese officials and experts on Monday said that a proposed EU law drafted by Germany, France and Italy and aimed at curbing Chinese investment in EU countries amounted to protectionism, and they urged the EU to treat Chinese companies fairly.

"China has always opposed any type of investment or trade protectionism and hopes the European side will treat companies' commercial activities objectively," the Chinese Ministry of Foreign Affairs said in response to an inquiry from the Global Times on Monday.

The ministry also said that economic and investment cooperation between China and Europe is the "main force" in China-EU relations, adding that Chinese investments in Europe are "normal market activities" that have created a lot of jobs and tax revenue for the host countries.

The foreign ministry was responding to a question regarding a reported draft law from the EU that aims to examine merger and acquisition (M&A) deals involving Chinese firms.

Germany, together with France and Italy, drafted the law, which would give EU officials a "legislative tool" to examine strategic takeovers by Chinese companies and even power to intervene, German newspaper Deutsche Welle reported on Sunday. Top German officials are calling for fast passage of the law, the report said.

"The move shows European countries' lack of confidence when facing the challenge from a rising China," Dong Dengxin, director of the Financial Securities Institute at Wuhan University of Science and Technology, told the Global Times on Monday, adding that there has long been a skeptical attitude toward Chinese investors in European countries.

Amid rising Chinese investment in Europe, politicians there have grown increasingly uneasy and have even intervened in some business deals.

Earlier this month, the German Ministry of Economics launched a probe into efforts by China Iron and Steel Research Institute Group to acquire German aerospace parts supplier Cotesa GmbH, according to media reports.

Such political intervention into normal commercial activities could hurt European companies as well, Chinese experts and officials have said.

In the statement on Monday, the Chinese Foreign Ministry also pointed out that Chinese investments have provided European companies with channels for capital and links to overseas markets.

Dong said that political intervention cannot curb most M&A activities because "Europe needs Chinese capital," and such deals are driven primarily by market forces. He added that Chinese companies can deal with rising political risks by seeking new methods of acquisition such as involving a third party or developing technologies themselves.

"However, the stern scrutiny in Europe over advanced technologies may create opportunities for China, since the pressure will encourage Chinese companies to innovate and conduct research in those areas by themselves," Dong noted.

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