The European Union will soon have a law to restrain Chinese acquisitions of European firms and technologies. According to Matthias Machnig, the state secretary at Germany’s federal ministry for economics, the legislation is progressing.

In an interview with Welt am Sonntag newspaper, he said EU nations urgently needed a “legislative tool” to examine strategic takeovers and stake-holding by foreign states and, if necessary, powers to intervene.

As reported by Deutsche Welle (DW), Germany’s international broadcaster, the legislative initiative was launched by Germany, together with France and Italy. It also had European Commission approval. It is now subject to consultations within the EU Council of Ministers and the European Parliament.

“It is urgently necessary that within this year we are handed a sharper legislative instrument to resist takeover fantasies or outflows of technology and know-how,” Machnig told the weekly newspaper.

“The EU with its innovative businesses is attractive for many around the world,” he added. “Firm takeovers are rising, unfortunately often under market-distorting financial conditions.”

As reported by the Reuters news agency, data from the Cologne Institute for Economic Research showed the volume of known Chinese investments in Germany reached €12.1bn in 2017 from around €11bn the year before and just €100m seven years ago.