GERMANY is planning to further toughen rules against non-European investors taking stakes in German companies, the country’s economy minister said Tuesday, as concern grows in Europe’s biggest economy over China’s shopping spree.

“In the future, we want to be able to take a closer look when it concerns defense-related companies, critical infrastructure or certain other civil security-related technologies, like in areas of IT security,” Peter Altmaier told Die Welt daily.

Noting that the government can only veto a foreign bid by non-EU investors if the stake for sale in the company reaches 25 percent, Altmaier signalled that Germany wants to lower the barrier.

“We want to bring down this threshold, so that we can check more cases in sensitive economic areas,” he said.

A German economy ministry source said the barrier will be brought down to 15 percent for non-EU investments in defense-related companies as well as such as companies making certain civil security relevant technologies.

If approved, the toughened regulation could be in force by year’s end, Welt daily reported.

Altmaier stressed that Germany remains open to investors, but national security interests take precedence.

“Of course, we want companies to keep investing in Germany,” he said. “But at the same time we have the duty to protect security interests, public order and security.”

If the draft rule is approved, it would be the second time in over a year that Germany is putting up more barriers against foreign takeovers.

Last year, the government had amended legislation to extend the range of companies eligible for a probe under “critical infrastructure” provisions or considered to be developing “key technologies.”

Alarmed by a spate of high-profile purchases of German companies by cash-rich Chinese groups, Germany has significantly stepped up its oversight of such investments.

Last week, the government voted to deploy a veto to block the sale of German machine tool manufacturer Leifeld Metal Spinning to China’s Yantai Taihai Corp.

The veto was not actually used as Yantai Taihai preemptively dropped their bid hours before the government’s vote.

The Chinese pullout also came just days after Germany took the unusual step of thwarting efforts by other Chinese investors to buy a 20 percent stake in an electricity transmission firm.

Citing “national security” reasons, the German government tasked a public bank with purchasing the stake in 50Hertz.

A study by consultancy EY found Chinese companies bought 54 German firms last year and invested US$13.7 billion in Europe’s largest economy.

But China has insisted it has no ulterior motives.

“Our investments do not threaten your national security. Through joint projects, we want to learn from your experiences and technologies,” said China’s Prime Minister Li Keqiang in Germany in July. (SD-Agencies)