The debate reeks of Donald Trump. The former German economics minister, Sigmar Gabriel, started it and his successor Brigitte Zypries is carrying on with it. She wants to protect German companies from hostile states, even though no one’s been calling for help. Ms. Zypries’ allies are, of all people, the French, who tend to nationalize everything they see, and the Italians, whose companies are up to their ears in debt.
The three governments have written a letter to European Union Trade Commissioner Cecilia Malmström. In it, they demand “intervention rights” if – as in the case of China – a company takeover is financed or subsidized by the government. Above all, if they are “systemically” going about it. Ms. Zypries wants to prevent this “sell-out of European expertise.” In the interest of the people in our country.
That sounds good in an election year. Although, as a rule, nothing tends to be sold dirt cheap at Germany’s expense as Ms.Zypries suggests. On the contrary, entrepreneurs freely decide to sell their know-how for good money – know-how they have developed together with their employees at great personal risk.
Delegating the matter to Brussels is the certain kiss of death.
Ms. Zypries claims she is looking at the big picture. In a sense, she wants to take German innovation hostage to force the nasty Chinese to finally open their markets – in line with the motto "together we are strong." A threatening posture isn’t such a bad idea, but it has to be pretty credible to impress Beijing. It would only work if it involves innovative products the Chinese can’t get anywhere else. Products that so far have hardly been sold in China and that foreseeably cannot be copied by the Chinese.
Otherwise the Chinese will give us a demonstration of how the market economy works. Having been snubbed, they’ll order less from us, develop products faster themselves, buy from international competition, and dream up new rules of the game for German firms in China. The upshot will be less profits for our companies. That's bad for Germany.
The argument that selling firms means “the technology is then gone for good” doesn’t hold water either. First, the Chinese aren’t paying €300 million for 10 folders full of drawings but for a group of highly-specialized people. If the new owners aren’t nice to them, the technology transfer won’t happen. And second, even if the technology belongs to the Chinese, that can be good for Germany in the long run because it would throw open the gates to the Chinese market.
One thing was at least tactically shrewd of Ms. Zypries. Delegating the matter to Brussels is the certain kiss of death. The minister has now disposed of this nonsense. Very elegant. Let’s hope it was intentional.
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