Germany rejects agreement with Chinese company for chip factory

Germany cancels agreement with Chinese company for chip factory

The German government blocked the sale of a chip factory to a Swedish company owned by a Chinese company, a decision that comes as Berlin struggles with its relationship with Beijing.

The movement of the cabinet it follows the recent controversy over a Chinese shipping company’s investment in a German container port and the Chancellor’s visit to Beijing. Olaf Scholz last week.

The government’s red light was waiting behind the German company Elmos said this week that the 85 million-euro (about $90 million) sale of its chip factory in Dortmund to Sweden’s Silex Microsystems AB may be blocked. According to German media, Silex is owned by Sai Microelectronics of China.

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Although the contract announced in December was not financially significant, and the technology involved was apparently not new, it raised concerns about the seriousness of the put German IT manufacturing power in Chinese hands.

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German Economy Minister Robert Habeck the government also announced that it had banned a second investment planned by an investor from outside the European Unionbut he won’t comment because it is still under the confidentiality of the company involved.

In banning both actions, Habeck said that security in Germany must be protected and “there is a great need to protect important industrial sites.”

“The important thing is that politically we are an open market economy, foreign investments, including countries outside the Union (Europe) are wanted and welcomed here, but the economy open market not stupid market economy,” he said. told reporters.

Western governments are increasingly wary of China’s technological ambitions and foreign policy. The United States and other governments have tightened controls on access to processing clear and other technologies.

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ScholzThe nearly one-year-old government has signaled a departure from Angela Merkel’s first trade deal with China. He plans to lay out a “comprehensive China strategy.”

That is still pending. But Foreign Minister Annalena Baerbock and others have made it clear that Germany wants to avoid the mistakes it made with Russia, which once had more than half of the country’s natural gas, but no supply.

However, last month’s decision highlighted unresolved questions about the extent to which Chinese companies are allowed to invest in Europe’s largest economy.

Officials debated whether to allow China’s COSCO to take a 35% stake in a container terminal in the port of Hamburg.

Members of both junior parties in the governing body opposed the move, but Scholz, a former mayor of Hamburg, downplayed its importance. In the end the Cabinet cleared COSCO to have a stake of less than 25%. Above that level, the investor can block the company’s decisions.

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Scholz is urging companies to diversify but not risk doing business with China. He said before his visit that “we do not want to be separated from China” but “we will reduce mutual interdependence in the spirit of mutual understanding.”

A spokesman for China’s foreign ministry, Zhao Lijiansaid earlier Wednesday that he was not aware of the sale of the chip factory but insisted that the Scholz government should do the same to Chinese companies.

Zhao told Germany to “provide a fair, open, and non-discriminatory market environment for the normal operation of all companies” and avoid “using national security as a pretext for protection.” “

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