German government moves to restrict foreign investment in companies tied to national security

Germany is seeking to limit China’s investment in sensitive firms, following revelations that state-owned China Southern Power Grid purchased a substantial share of a 1,650-kilometre natural gas distribution network and a 420-kilometre high- and medium-voltage network in western Germany, according to an article in Handelsblatt Global. The German government is considering lowering the threshold for the review and veto of foreign acquisition of critical infrastructure, according to the article. The push comes on the heels of the German government’s move to block Chinese acquisition of power transmission grid operator 50Hertz “on national security grounds”. The government may currently review an investment in a firm linked to national security if a foreign entity seeks to purchase at least 25 percent of its shares. Under the revised law, that threshold would be lowered to 15 percent, the article says.

Read the article in English here. 

For background, read the news digest item German politicians closely watch Chinese company’s plans to buy share in German grid operator, the dossier The energy transition and Germany’s power grid, and the article Sino-German tandem: Export champions promote global energy transition.