EU looks to tighter investment screening as unease over China grows

The European Union may 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 MEP.

Franck Proust, a French member of the European Parliament, said the assembly and EU governments may reach an agreement by year-end on the first bloc-wide rules meant to prevent foreign direct investments from threatening national security.

Mr Proust is leading the parliament's deliberations over an investment-screening law proposed in September by the European Commission. The draft legislation needs more teeth to ensure Europe keeps strategic industries in its own hands, he said.

“It is timid,” Mr Proust, who belongs to the Christian Democrats, the EU Parliament’s largest group, said in an interview in Brussels. “We want to be more ambitious and go very fast in the approval process.”

Xi’s power grab in China reminiscent of Mao’s time

---

Unemployment drops to 6% in February

---

Labour’s new approach to Brexit

---

Brexit basket case: the British have forgotten how to deal with facts

---

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 as a result of national-security worries and Germany moved to shield cutting-edge technologies after a bid by China's Midea Group for robot maker Kuka prompted an outcry.

Protectionist stance

This transAtlantic view contrasts with EU displeasure over Mr Trump’s protectionist stance on trade, including a controversial plan to impose tariffs on foreign steel and aluminium, a position that has aligned Europe with China and highlighted global geopolitical cross currents.

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 of almost 10 per cent of Daimler – while European investment in China has fallen.

“The Chinese aren’t advancing anymore in hidden fashion, they are advancing openly,” Mr Proust said. “There are strategic sectors where they want to be masters of the world by 2025. We know that.” – Bloomberg