Tue, Nov 20, 2018 - Page 10 News List

EU to tighten FDI rules to thwart China’s moves

Bloomberg

The EU is hammering out the first bloc-wide rules to prevent foreign investments from threatening national security, as Chinese acquisitions foster political unease.

Negotiators representing EU governments and the European Parliament might agree today on draft legislation to screen foreign direct investments (FDIs), said Franck Proust, a French member of the 28-nation assembly.

Both sides have settled on 95 percent of the text and the goal at the meeting in Brussels is to bridge differences over the remaining part, which includes the politically sensitive matter of how far EU members can push concerns about FDI with their peers, Proust said.

“Everybody has the common will to work in the same direction,” Proust, the chief negotiator for the European Parliament, said in an interview last week at the assembly’s headquarters in Strasbourg, France. “I remain positive.”

Concerns are mounting across the Western world about national security risks tied to foreign investment, particularly by China.

Last year, US President Donald Trump blocked a Chinese-backed investor from buying Lattice Semiconductor Corp as a result of national security worries and Germany moved to shield cutting-edge technologies after a bid by China’s Midea Group Co (美的集團) for robot maker Kuka AG prompted an outcry.

Earlier this year, the German government stopped a Chinese bid for the first time by vetoing the potential purchase of machine-tool manufacturer Leifeld Metal Spinning AG.

“We are making up for lost time,” Proust said. “All the world’s other powers have their own investment-screening systems. Only Europe doesn’t have such a tool.”

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