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Launch of a rocket with satellites in early September in the China Sea

Photo: IMAGO / IMAGO/VCG

The German government prohibits the takeover of the German satellite company Kleo Connect by its Chinese majority shareholder Shanghai Spacecom Satellite Technology (SSST). This is reported by the »Handelsblatt« and several news agencies, citing government circles. Accordingly, the cabinet approved a decision by the Federal Ministry of Economics, which rejected the complete takeover after an investment review.

SSST already owns around 53 percent of the company, but wanted to acquire another 45 percent of Kleo Connect from the German company EightyLeo. Kleo Connect wants to place a worldwide network of a total of 300 satellites in orbit – similar to the company Space X with the Starlink project – and then offer global civil satellite communication services with an appropriate ground infrastructure. This is now considered a strategically important area, which was also shown by the debate about the use of the Space X network in the war between Russia and Ukraine.

The decision fits in with the line of Economics Minister Robert Habeck (Greens) to take a closer look at Chinese takeovers. Reinhard Houben, economic policy spokesman for the FDP parliamentary group, said that the decision of the federal government was logical in view of the geopolitical conditions.

"Satellite communications is a sensitive area of particular security interest for the Federal Republic of Germany," Houben said. It was "the first decision of the German government against the background of the new China strategy".

The German government presented its new China strategy in July. It states that foreign direct investment by Chinese companies opens up access to markets and technologies. This should not pose a risk to German public order and security, for example through the outflow of security-sensitive technologies.

Since the Russian attack on Ukraine, too much economic and technological dependence on countries like China has been debated, especially in areas of critical infrastructure. For example, the rules for investment screening have been tightened, especially in areas of critical infrastructure. Recently, there had also been different opinions within the traffic light government on the question of whether the Chinese state-owned shipping company Cosco should participate in an operating company of a container terminal in the Port of Hamburg.

Habeck welcomes investigation into e-car subsidies

New tensions with China are also emerging in the field of electromobility. EU Commission President Ursula von der Leyen announced an anti-dumping investigation into electric cars from China at the European Parliament in Strasbourg on Wednesday. Their price is artificially depressed with state subsidies. Europe is open to competition, but not to an unequal race to the bottom, von der Leyen said. "We have to defend ourselves against unfair practices."

Habeck welcomed the decision. It is about "unfair competition" and not about keeping powerful, cheap cars out of the European market, said the Green politician at a joint press conference with his French counterpart Bruno Le Maire and Federal Finance Minister Christian Lindner (FDP). The aim is to find out whether China is using "hidden, direct or indirect subsidies". "What else should you do if you suspect that there is unfair competition?"

dab/Reuters/dpa