In an unprecedented move, the German government has vetoed the sale of Leifeld Metal Spinning AG (a member company of VDW) to a Chinese investor.

Although Germany’s investment screening law was tightened in July 2017, it has not — until now — been used to actually block an investment.

After a series of Chinese takeovers of sensitive technologies in 2016-2017, Germany was a pioneer in promoting an EU-wide screening of Foreign Direct Investment (FDI) coming from outside the EU; the USA, Canada and Australia had already been taking a stronger stance regarding Chinese take-overs of aerospace, military and other sensitive technologies.

CECIMO — the association representing the European machine tool industry — says that by blocking the takeover of a relatively small company, Germany has signalled that it is willing to take a harder line on FDI and is, in effect, saying that the buyouts of high-end technologies are part of the “Made in China 2025” strategy, which aims to replace imports of advanced technologies with domestic production in China.

In September 2017, the European Commission published a ‘proposal for regulation’ that established a screening mechanism for FDI into the EU and aims to establish an information exchange between member states.

CECIMO is finalising its ‘position paper’ regarding this initiative; it will also be issuing a briefing paper explaining “Made in China 2025”, plus the risks and opportunities for EU SMEs working in the machinery sector.

Further information on this matter can be obtained from Olga Chilat ().