The European Union’s industry chief said that European governments and businesses shouldn’t be naive about Chinese investment on Monday, October 31.

European Commissioner Thierry Breton’s comments seemed to be aimed partially at Germany, whose Chancellor Olaf Scholz will visit Beijing this Friday, October 4.

Scholz will then be the first E.U. leader to go to Beijing since the COVID-19 pandemic began.

The German Chancellor has received widespread criticism for letting Chinese state-run shipping company COSCO invest in the German port of Hamburg. This happened while his governing coalition partners didn’t want to because they were worried about Chinese influence on major infrastructure.

Breton told Reuters that he “liked” the decision to sell 25% of the facility to China’s COSCO instead of the previous plan, which would have sold China more than a third of the stake. 

He warns, “We need to be extremely vigilant.”

According to sources from the French and German governments, French president Macron once suggested going with German Chancellor Scholz to Beijing to show E.U. unity as China has been plotting to drive a wedge between E.U. countries.

Sources said that Scholz denied Macron’s offer.

European Union’s industry chief Breton said that E.U. countries should work together more. 

He said, “It’s very important that the behaviour of member states towards China… change in a way that’s more coordinated than individually-driven, as China obviously wants us to be.”

For the past few years, the E.U. has taken a number of defensive measures to more closely monitor state-owned foreign companies, especially from China. The bloc fears rival powers can use this investment to acquire more political leverage. 

According to Breton, in 2019, the E.U. called China a “systemic rival” and has since taken steps to limit investments in critical infrastructure. 

He also warns European companies about putting more money in a China that is becoming more “autocratic.”

The E.U. has adopted a more defensive approach towards China after they saw what Beijing did during the pandemic. The authoritarian regime exploited other countries’ reliance on China for equipment such as face masks to gain diplomatic leverage.

The E.U.’s industry chief said, “We can’t forget all of that.” 

“The era of naivete is over. The European market is open, with conditions.”

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