24.05.2018 Ι Chinese companies enjoy great freedom in Germany and the EU so far. However, doubts about the seriousness and good intentions of certain investors are growing. The conflicts in German companies are increasing.
A positive sentiment increasingly gives way to skepticism when Chinese entrepreneurs access German technology companies. “Not all Chinese investments are successful, and employee rights are increasingly falling by the wayside,” says Wolfgang Lemb, Managing Director of IG Metall. Fears are growing that Chinese, supported by state subsidies, are buying up know-how and closing down German factories.
Private, semi-state or state investors from China have been on the ramble for a few years in Germany and Europe. They were particularly impressed by high technology companies in the German chemical, pharmaceutical, metal and electrical industries. Above all else, the Chinese government’s industrial policy goal, as part of the “Made in China 2025” strategy, is to take over supremacy in key industries such as the automotive, mechanical engineering and robotics industries by 2049 – the 100th anniversary of the People’s Republic. With this, the Chinese are contesting the German economy’s core competences.
Negative experiences increase
At the beginning of their shopping spree, Chinese investors have often successfully fueled German companies. “There are certainly some positive cases where the Chinese commitment has led to job security or even employment growth,” explains Wolfgang Lemb. “But now the negative experiences and conflicts in the companies are increasing.” Whether the planned or already substantial job cuts at German locations have to do with the fact that technology has been deducted and thus the locations are becoming superfluous from the point of view of Chinese investors, must be urgently examined.
Employees and works councils are also complaining about complaints, because Chinese managers often do not care about labor law and a culture of codetermination: What is a collective agreement? What are the employees’ participation rights? Works councils and the IG Metall have to explain these questions to the new bosses from China – if they are heard at all.
Binding investment audit
The IG Metall shares the concerns of works councils and employees and calls for a binding investment audit, which also includes an industrial and labor policy dimension. For in Germany, a takeover so far can only be put off, if this “public safety and order” is at risk. And only if an investor targets at least 25 percent of a company. In 2016, for example, the German government failed unsuccessfully to prevent the sale of the robot manufacturer Kuka to the Chinese household appliance manufacturer Midea.
German Chancellor Angela Merkel will talk about access to the Chinese market and access to the German economy on Thursday and Friday on her trip to the Far East with President Xi Jinping and Prime Minister Li Keqiang. Because of experiences like that at Kuka, the German government is alarmed. Germany was therefore one of the driving forces behind a common European framework for the national review of foreign investment. At the end of 2018, a corresponding proposal by the EU Commission is to be adopted.
So far, the EU Member States lack a uniform line, especially in dealing with China. IG Metall sees an urgent need for action and calls for the development of a strategic European industrial policy in order to promote particular sectors and branches of industry in particular and to keep them in Europe. To protect the employees and technologies.