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Chinese takeover not threat: German research


08:54, April 12, 2013

BERLIN, April 11 (Xinhua) -- China's increasing number of acquisitions in Germany is not a threat to German technology, but an opportunity for German firms' development, a research showed on Thursday.

In recent years, more and more Chinese companies including Sany, Lenovo and Weichai Power have either bought German firms outright or acquired a shareholding in them.

"Contrary to initial expectations, most of the new owners (from China) are not interested in draining their newly acquired companies of knowledge. Instead, we are seeing productive collaboration in research and development," said Technische Universitat Munchen (TUM) and the Munich Innovation Group in a statement.

The two institutes found in a recent study that more than 75 percent of Chinese investors chose to strengthen the German research and development departments, instead of relocate the know-how to Asia, after they took over German firms. In many cases, German management team was retained.

The research was based on economic databases, commercial register entries and patent applications. 50 Chinese companies from electronics, mechanical engineering, regenerative energy sectors, as well as international conglomerates were involved.

It's a win-win situation for both Chinese and German companies. Some of the Chinese investment were prompted by a desire to extend buyers' value chain by integrating upstream and downstream development and production steps, the study found.

By acquiring German firms, Chinese investors could extend their research and development capabilities, establish new sales locations and expand their customer and logistic networks.

"Acquisitions by Chinese companies do not pose a threat per se," said Professor Isabell Welpe, TUM's Chair for Strategy and Organization.

"In many cases, the experience has been a very positive one for the German companies involved. The investors' strong financial footing has helped them safeguard jobs and production capacities, advance the development of their technologies and gain access to the Asian market," she said.

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