The German government is taking steps to counter a surge in Chinese bids for stakes in German technology companies, including the creation of a billion euro fund that could rescue such firms in financial trouble. Senior officials are also working on changes to foreign trade regulations to ensure that key technologies remain in German hands. These would include government reviews of foreign acquisitions of stakes in companies below the current 25% threshold, and expanding which types of purchases must be examined. “This is an issue that we are working on very intensely,” said the source, who was not authorized to speak publicly. The German government was galvanized into action by the surprise takeover of robotics firm Kuka by China’s Midea in 2016 and the purchase earlier this year of a 9.7% stake in Daimler by Chinese carmaker Geely.

Chinese companies completed 30 acquisitions in Germany last year, nearly double the number for 2016, and Chinese proposals accounted for 40% of the 165 reviews of foreign takeover plans in the last three years, the source said. “China is working diligently to close technology gaps and dominate the world market with new technologies,” he added. Chinese firms, some state-owned, were particularly interested in German companies with special know-how, start-ups in the area of new technologies, and companies active in critical infrastructure fields. As a last resort, the government also wants to set up a fund that could help companies if no private investors could be found to replace a possible Chinese bidder, or if guarantees by the state development bank KfW were not sufficient. “We are talking about a billion euros that would be available as a last resort,” the source said, adding that the money could also be used proactively to support development of key technologies by German firms, the South China Morning Post reports.