The German government’s recent prohibitions of sale of two German chip companies to Chinese investors reflect changing attitudes and China’s perceived threat to critical technologies.

On November 9, the Federal Ministry for Economic Affairs and Climate Action blocked the sale of Dortmund-based chip maker Elmos, which was due to be sold to the Swedish subsidiary of Chinese Sai Microelectronics, and Bavaria-based ERS Electronic GmbH, which was set to be acquired by an undisclosed Chinese investor.


Daniel Wiedmann, head of the antitrust department at law firm Poellath, tells fDi that these blocked transactions reflect a broader “shift” in the way that Germany treats Chinese investment. 

“The German government is aware of its dependency on China and does not want to leave itself vulnerable,” he says. “We’re living in a completely different world compared to the 1990s or even the early 2010s,” he adds. 

Of the decision to block the sale of the German chip companies, Robert Habeck, Germany’s minister for economic affairs and climate protection, said in a statement that “Germany naturally is and will continue to be an open destination for investment, but we aren’t naive”.

Germany naturally is and will continue to be an open destination for investment, but we aren’t naive. 

Robert Habeck, minister for economic affairs and climate protection, Germany

Mr Wiedmann attributes the blocked transactions to a change in perception, underpinned by a new geopolitical situation, in the wake of Russia’s invasion of Ukraine war and the changes in the German government following Olaf Scholz’s election last year. “There has been a realisation of how bad it is to depend on one trade partner, like Russia,” he adds.


Under the new ‘traffic light’ coalition government, the Federal Ministry for Economic Affairs and Climate Action and the Federal Foreign Office are now both controlled by the Green Party.

In addition to the blocked sales of chip companies, Berlin has also stepped in or forestalled numerous other takeovers over the course of 2022. It failed to grant the takeover of Munich-based Siltronic by Taiwanese GlobalWafers within the necessary timeframe; it banned the sale of respiratory product manufacturer Heyer to the Chinese company Aeonmed Group; and it approved a reduced stake of Chinese shipping company Cosco’s investment in one of the German logistics company HHLA’s ports in Hamburg.

There have only been 8 recorded Chinese greenfield projects in Germany so far this year, according to fDi Markets, while full-year data for 2021 showed 76 such investments in Germany.

In its second annual report on foreign direct investment (FDI) screening in the EU, published in September, the European Commission outlined how very few transactions were blocked in 2021.

“Only 1% of the transactions were blocked by member states,” it reads, while this figure stood at 2% in the previous year, confirming that “the EU remains open to FDI and member states only deny cases that pose very serious threats to security and public order”.

In absolute numbers, of some 1500 notices, only five projects were blocked last year.

But the mood music is not only changing in Germany. On November 30, the UK announced it will buy China General Nuclear Power Group out of its Sizewell C nuclear energy plant. It will take a 50% stake in EDF’s £20bn project as it seeks to reduce Beijing’s involvement in the country’s infrastructure.

Mr Wiedmann says that there are now also discussions in Germany over controls over outbound German investment, referring to the German government’s unpublished China guidelines.

“There’s a strong focus on diversifying foreign trade, diversifying the German economy and investing less in China,” he says.

China remains Germany’s main trading partner, with goods worth €246.5bn traded between the two countries in 2021, according to German government statistics.

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