Many European businesses and governments strongly criticized the European Union plan. They decided to monitor the investments into China. Many companies believe that this decision would hurt international investment and it would interfere too much in company decisions. Recently the Federation of German Industries(BDI) argued that foreign investments proved very beneficial for the growth of German companies. They support the economy and also secure jobs for the new generation. Additionally they strongly stand against any new rule that would control these investments.
Last year, the president of the EU Commision, Ursula von der Leyen introduced the idea of screening. Also it is part of a broader strategy to save Europe’s economic security. China was the central focus point for it.
Although China isn’t directly mentioned, the plan clearly targets concerns about it. Von der Leyen insists on reviewing investment policies to better manage the EU’s relationship with China.
However, the strong pushback suggests that this plan might struggle to be implemented effectively.
Brussel is worried that the Chinese military might utilize the advanced technology. The main point of concern is that it is not clear which buyers are directly linked to the Chinese defense sector. In order to address this issue, Brussel os collaborate with the United States. This is the nation that already has measures to stop investments in some Chinese industries.
According to the plan the investment is measured in top 4 areas. It includes semiconductors, artificial intelligence, biotechnology, and quantum computing. However, they also plan to add more areas later on. However, Europe is facing many controversies due to the idea of controlling investment. As this strategy would interfere with business special decisions and also harm the international laws.
For example, SEMI Europe, representing electronics companies, thinks controlling European companies’ investments abroad isn’t the right way to ensure economic security. BusinessEurope, a group representing businesses across EU countries, is also cautious, saying this could hurt research, innovation, and global operations.
Many countries are doubtful about the plan. It includes the Netherlands and Sweden. One country that strongly supports the idea is Lithuania. Other EU countries wonder if it’s necessary, especially since EU investments in these Chinese sectors are low.
An expert of geoeconomics, Tobias Gehrke, strongly believes that dealing with the United States is very important. This is the only way that von der Leyen’s best securing support for a new EU investment policy. He explains that the United States plays an important role in this plan. As monitoring investments leaving the EU to prevent technology leaks, is closely connected to US interests. Gehrke also argues that success of this policy strongly depends upon the political relations between the United States and Europe than on actual evidence of harm.
There isn’t much interest within the EU to move this policy forward, but keeping the discussions alive could be beneficial for future political negotiations. During the EU’s consultations, only three government ministries, from Austria, Czechia, and Sweden, participated. Two of these ministries admitted they lacked knowledge about the potential risks.
A report showed that European investments in key sectors in China are small, mostly led by German companies. Some EU countries think that if they establish a unified export control system, it would reduce the need for this new policy.
The company is pushing for the European union. They want to unify the rules across the different member states of Europe. They believe that one strong voice is making the deal with the United States more effective. So, all 27 nations should speak with one single voice.
SEMI Europe, which includes ASML as a member, expressed that better coordination on export controls is crucial for Europe’s economic security. They believe this is the best way to prevent critical technologies from leaking, as these controls already consider technology transfers.
The EU commission plans to monitor investment flows in four key sectors among the 27 member states and will follow up with a risk assessment report.
