Germany trembles as Chinese march into its industrial turf
Reaction from Berlin borders on racism as firms from China gobble up hi-tech companies in Germany and elsewhere in Europe
You learn something new every day. For me today, it’s the German word schlitzaugen, a derogatory term meaning “slitty eyes”.
It’s been widely reported that Germany’s European commissioner, Guenther Oettinger, used it to describe Chinese people while he also mocked a delegation of visiting mainland officials for having “their hair combed from left to right with shoe polish”. He was speaking at a private forum but someone uploaded his offending speech onto the internet.
I am somewhat upset as I have schlitzaugen, too. But behind his borderline racist language there lies simmering anger among top German officials against the threat of Chinese corporate takeovers. Resentment often has a cause, and it’s not always – or purely – racism.
It’s the latest chapter in Sino-German relations. In a recent newspaper interview, Oettinger warned that Europe’s hi-tech industry “should not just be sold off”, and that other EU member states should support a “stronger industrial policy” to protect home-grown hi-tech companies. He didn’t name China but was clearly thinking about it.
Besides Oettinger, Germany’s economy minister, Sigmar Gabriel, and Chancellor Angela Merkel have warned against China’s insatiable lust for advanced European technologies.
This came after Chinese appliance maker Midea took over Kuka, a robotics producer and one of Germany’s most innovative engineering firms, this summer. The Merkel government tried but failed to find a European bidder for Kuka. Last week, the German government abruptly withdrew approval for the €€670 million (HK$5.7 billion) takeover of chip-equipment maker Aixtron by the Fujian Grand Chip Investment Fund.
Before heading to China with a delegation this week, Gabriel wrote in a Die Welt newspaper column that China was strategically buying up key technologies in Germany while protecting its own companies against foreign takeovers.
This year, Chinese companies have racked up 47 deals to buy German targets worth a total of €10.3 billion, according to Thomson Reuters, compared with 29 deals worth €263 million in all of 2015.
Unsurprisingly, Germany is taking a hardline within the European Union on whether to grant China “market economy status” from December, to which Beijing argues it is entitled 15 years after joining the Word Trade Organisation.
Chinese corporate leaders may be celebrating their takeovers, but Germany, for obvious reasons, does not share the same good feeling.
Oettinger’s offensive language notwithstanding, Germany’s fear and loathing is very real.