Should the EU temporarily ban Chinese takeovers of struggling firms?

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The EU Should Consider a Temporary Ban on Chinese Takeovers of Struggling Firms

A prominent European political leader has proposed a temporary suspension of Chinese acquisitions of struggling European companies. Manfred Weber, the head of the European People's Party (EPP) group in the EU Parliament, suggested a twelve-month moratorium to prevent Chinese investors, sometimes backed by state funds, from capitalizing on economic difficulties exacerbated by the coronavirus crisis. This proposal stems from concerns that China is increasingly targeting European firms facing financial hardship, a trend Weber views as a strategic move by a future competitor.
Proposed Twelve-Month Moratorium

Manfred Weber has advocated for a coordinated European response to what he terms the "Chinese shopping tour." His proposal specifically calls for a ban on Chinese investors acquiring European companies for a period of twelve months. This timeframe is intended to cover the duration of the current economic crisis, providing a window for European nations to protect their strategic assets and industries from potentially opportunistic acquisitions.
Rationale Behind the Proposal

The core of Weber's argument rests on the observation that Chinese companies, often with state financial support, are actively seeking to purchase European businesses that are either undervalued or are experiencing financial distress due to the pandemic. He expressed a need for Europe to protect itself from such acquisitions, highlighting a broader view of China as a significant future competitor in economic, social, and political spheres. Weber characterized China as an authoritarian model aiming to expand its global influence.
German Precedent and Concerns

Germany, in particular, has been actively reassessing its approach to foreign investment, especially from China. The German government recently strengthened regulations to shield domestic companies from takeovers by non-EU entities. This move was influenced by past events, including the 2016 acquisition of the robotics firm Kuka and a 2018 attempt by China's State Grid to acquire a stake in the power grid operator 50Hertz. These incidents served as wake-up calls, underscoring the need for Germany to safeguard critical sectors of its economy.

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Should the EU temporarily ban Chinese takeovers of struggling firms?

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