The EU might beef up a plan to screen foreign investments as China’s pursuit of acquisitions abroad fosters political unease in the bloc, according to a key EU lawmaker.
Franck Proust, a French member of the European Parliament, said the assembly and EU governments might reach an agreement by year-end on the first bloc-wide rules meant to prevent foreign direct investments from threatening national security.
Proust is leading the EU Parliament’s deliberations over an investment-screening law proposed in September last year by the European Commission, the 28-nation bloc’s regulatory arm.
The draft legislation needs more teeth to ensure Europe keeps strategic industries in its own hands, he said.
“It is timid,” Proust, who belongs to the Christian Democrats, the EU Parliament’s largest group, said in an interview on Thursday in his 13th-floor office in Brussels. “We want to be more ambitious and go very fast in the approval process.”
Concerns are mounting across the Western world over 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.
This trans-Atlantic view contrasts with EU displeasure over Trump’s protectionist stance on trade, including a controversial plan to impose tariffs on foreign steel and aluminum, a position that has aligned Europe with China and highlighted global geopolitical crosscurrents.
In Europe, the question marks over Beijing’s policy intentions are compounded by its controversial Belt and Road Initiative to upgrade infrastructure worldwide, its Made in China 2025 plan to promote manufacturing prowess and a deadlock in talks on an investment accord to scale back Chinese market barriers for EU-based businesses.
Amid that stalemate, Chinese acquisitions in Europe have remained strong — with the latest high-profile transaction being the purchase by billionaire Li Shufu (李書福) of almost 10 percent of Daimler AG — while European investment in China has fallen.
“The Chinese aren’t advancing anymore in hidden fashion, they are advancing openly,” Proust said. “There are strategic sectors where they want to be masters of the world by 2025. We know that.”
The draft European legislation would stop short of handing the EU the kind of decision-making clout over foreign investments enjoyed by the White House, reflecting the political sensitivity in Europe of encroaching on national sovereignty.
The commission proposal foresees a combination of data collection, information exchange and peer pressure to create a “cooperation mechanism” in this area.
The proposal would create a centralized database of past foreign investments in Europe and an alert mechanism for future ones without taking the ultimate power of approving deals away from individual EU governments.
The goal is to limit foreign threats to “critical infrastructure,” including in the energy, transport, communications, data, space and financial industries, and to “critical technologies” such as semiconductors, robotics and artificial intelligence.
Proust said he wants to bolster the draft law in three key ways: Require an EU government to come up with an alternative arrangement when a planned foreign direct investment in that country is opposed by the Brussels-based commission and by at least nine member nations (the commission’s proposal would do no more than force EU capitals to take “due consideration” or “utmost account” of reservations elsewhere in the bloc).
Widen the list of strategic industries to include aeronautics and media and give the EU Parliament the right to order commission screening of particular cases
Proust said he might also introduce language in the draft law to ensure that EU governments heed their obligation to share information on foreign-investment projects that end up being subject to the cooperation system.
It is not just China helping to unite the EU, according to Proust, who said former communist eastern members wary of Russian investments in Europe are signaling support for the draft law.
Proust plans to present his amendments on March 21 and March 22 and the parliament’s International Trade Committee intends to vote on them in the middle of May, after which the spotlight will shift to the deliberations among EU governments.
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