Government sources said that Germany planned to pass legislation by the end of 2019 to set up a state-owned fund to protect key enterprises from being acquired by Chinese and other foreign companies, a move that markedly changed the inherent attitude of German "non-intervention" enterprises.
German Economy Minister Artemir proposed in February to set up the fund to make industrial strategies more defensive; three officials told Reuters that the government is currently studying draft legislation so that the fund can start and operate next year.
Two senior government officials, who asked not to be named, said the main idea was to let the state-owned investment fund work with the private sector in buying corporate equity to block unwelcome acquisitions.
One official said that the government could buy some shares and sell them to private investors as soon as possible; another said that in some cases, the fund might cooperate with private investors from the outset.
"In the past, Germany was too passive in defining national interests, and now things are changing," said the first government official.
"We don't think we can continue to stand by and let the free operation of market forces decide everything," he said. "This means more protection at the national level."
The German move is aimed at tackling the threat of China's government-driven evolution from customers to competitors, as well as the imposition of unilateral trade sanctions and tariff increases by US President Trump, according to the sources. Germany has always been a strong supporter of free markets.
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