German angst over Chinese M&A

Kuka’s robotic arms are a familiar sight on assembly lines, like this Mercedes-Benz plant in Germany, but the majority Chinese-owned company wants to expand beyond the factory

 

Germany is a top target in China’s search for innovative engineering groups — but some see a threat

At this year’s Hannover Messe, the world’s biggest industrial fair, it was one of the stars of the show: an elegant, ultra-sensitive robot known as an Iiwa that can pour a beer and brew a cup of coffee.

Angela Merkel and Barack Obama, guests of honour on the Messe’s opening day, were intrigued. “Can it squeeze lemons?” the German chancellor asked.

The Iiwa — or intelligent industrial work assistant — is produced by Kuka, one of Germany’s most innovative engineering companies. But it will not be entirely German for long. Less than a month after the fair, a Chinese appliance-maker called Midea offered to buy Kuka for €4.5bn, in the largest ever Chinese takeover of a German company. Continue reading

The New Silk Road (I)

And Germany will do it. When push comes to shove, it has historically sided with Russia and other axis powers. China should be no exception. In a time when America is suiciding itself off the world stage, it’s a matter of survival for its allies as they seek more stable and consistent alliances.

 

BEIJING/BERLIN (Own report) – With tensions rising between China and western powers, the German chancellor is using her current visit in Beijing to enhance Sino-German economic cooperation. German investments in the People’s Republic of China had increased to around 60 billion Euros in 2014 – tendency still rising – surpassed only by investments in the USA and a few EU countries. Business representatives are campaigning in favor of stronger German participation in a Chinese trillion-dollar project. This project named the “New Silk Road,” is aimed at bolstering ties between Eastern Asia and Europe. The project, also on the agenda of today’s German-Chinese government consultations, has two components, overland and maritime transport routes. Trade by train from Chongqing to Duisburg and by ship through the South China Sea and the Indian Ocean to the Mediterranean will be enhanced. While German companies hope for lucrative business deals, strategists warn that the New Silk Road could enhance Beijing’s global influence – and ultimately break the western powers’ global dominance.

Continue reading

China Just Nationalized $6 Trillion of Stock Losses

China’s stock market had what traders call a “Dead Kitty” bounce on Thursday as the communist authorities dispatched police and security personnel to “encourage” insider-buying and to arrest short sellers. With the Chinese market still highly inflated even after falling $3 trillion in value, China took action last night to “nationalize” about $6 trillion in losses.

China is about to show its third straight quarter of negative real (after inflation) GDP growth. The nation had been relying on a stock market boom to play a “decisive role” in funding the nation’s “Silk Road” reforms to transition to a consumer economy.

But as Breitbart News warned in “China’s Lehman Brothers Weekend Begins,” the “Red Dragon” has suffered a financial collapse equivalent in degree to the U.S. stock crash in 2008-9. Unlike the U.S., which used a formal government bailout to stabilize markets, the Communist Party instructed the nation’s banks to use their own balance sheets to guarantee the current $8 trillion stated value of all of China’s 2800 listed stocks. Continue reading