FP: How China is Buying Up the West’s High-Tech Sector
Tue December, 2020, Age: 2 years
Taking cues from the U.S.’ CFIUS framework, countries in the EU—including the UK, Sweden, France, Germany and Italy—have worked to strengthen their laws preventing foreign acquisitions of their most innovative firms. But such laws aiming to prevent China’s acquisition of strategically key Western firms may be too little, too late. FP reports that Chinese influence taps into start-ups long before they’re mature enough to be acquired. In addition to public investments in Western firms by Chinese venture-capital groups, Chinese entities can also invest in Western start-ups through limited partnerships with Western firms, which allow the Chinese to gain access to the technology in which they invest without having their names touted throughout the process. Through limited partnerships, Chinese firms may have less control over new technologies, but access to the firm and a say in its strategy at the early venture-capital stage is still highly attractive.