How dependent is our economy on China?

In Saxony, on the other hand, new settlements from China are “rather rare”, according to the Saxon Ministry of Economic Affairs. This is also proven by the investment sums from China, which were supported with state GRW subsidies (“Community task: improvement of the regional economic structure”). Because while Saxony has only subsidized 5.2 million euros in investments from China in the last 20 years or so, in Saxony-Anhalt it was 119.3 million euros for the same period. In Thuringia, Chinese investments totaling 335 million euros have been funded since 1990. Funding is only available if, for example, new machines and systems are purchased and new jobs are created as a result.

According to Rusche, new settlements are positive in many respects, above all because they bring know-how to Germany. On the other hand, the Federal Republic wants to protect itself against takeovers and majority holdings by Chinese investors in certain cases. “One of the fears is that China’s economic rise will be unfairly promoted with the help of state-controlled investment programs such as ‘Made in China 2025’. The aim of the measures taken should therefore only be to remedy the distortions of competition caused by China,” explains Rusche. For example, company purchases and takeovers in security-related areas above a certain volume must first be approved by the Ministry of Economic Affairs. Investments in “critical infrastructure” companies – which include certain armaments companies – are already being examined from a target purchase share of 10 percent. Companies in the healthcare sector as well as emerging technologies such as semiconductors, artificial intelligence, 3D printing or quantum technology are examined with a possible participation of 20 percent or more. For all other acquisitions, the threshold of 25 percent applies.

China on the way to becoming an “industrial superpower”?
By its 100th birthday in 2049, the People’s Republic wants to have risen to become the world’s leading industrial superpower. By 2025, China already wants to achieve a number of milestones. Among other things, the country’s leadership plans to become world leaders in ten sectors, including energy transport, aerospace, rail and electric mobility, over the next eight years. Other key sectors in which the country wants to grow are mechanical and plant engineering as well as robotics, medical technology and chemicals. These are all sectors in which the Federal Republic is also well positioned.

From December 2017, the Ministry of Economics had the majority takeover of the Saxon company Cotesa critically examined. The medium-sized company from Mittweida near Chemnitz specializes in lightweight components, highly resilient fiber composites for the aviation and automotive industries, but also for the military. At the end of the review in April 2018, the go-ahead was given for the takeover by AT&M (Advanced Technology & Materials), a subsidiary of the state-owned China Iron & Steel Research Institute Group. Estimated price of the transaction: between 100 and 200 million euros. Goal of the German management of Cotesa was to gain access to the Chinese market and, in addition to Airbus and Boeing, to also supply the Chinese aircraft manufacturer Comac in the future.

China not in the top group of foreign investors in central Germany

Between 2016 and 2018, companies from the Middle Kingdom invested more than ever before in Germany. According to the Cologne Institute for Economic Research, 2017 saw the highest level of investment to date, at EUR 12.1 billion. However, the same does not apply to the central German states, since it is mainly individual takeovers that drove up the total, according to economics expert Rusche. And these large companies are mostly not in Central Germany.

According to the Saxon Ministry of Economic Affairs, Chinese takeovers and majority holdings in 2019 – despite a dynamic increase from 2018 to 2019 alone – accounted for only around 6 percent compared to other foreign investments. This puts China ahead in terms of the number of investment projects not in the top group of foreign investors, This is also the conclusion of the Saxony Economic Development Corporation.

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