The German government has taken a strong stance against China by blocking a Chinese firm from acquiring satellite startup KLEO Connect. Shanghai Spacecom Satellite Technology, which already owns 53% of the company, sought to acquire the remaining 45% minority stake from German company EightyLeo. However, the German economy ministry made the decision to prevent the takeover.
KLEO Connect has ambitious plans to establish a network of more than 300 small, low earth orbit satellites by 2028. The company aims to provide global communications services, similar to SpaceX’s Starlink project. Berlin’s decision to block the Chinese firm’s takeover is in line with its recent tough approach towards China.
Over the past year, the German government, led by Chancellor Olaf Scholz, has been increasingly concerned about strategic dependencies on China. In November, Germany blocked Chinese investment in two domestic semiconductor producers due to national security concerns. The flow of sensitive technological know-how to Beijing was also seen as a potential risk.
In May, the German government allowed China’s state-owned shipping giant, COSCO, to acquire part of a Hamburg port-based container terminal, despite objections from multiple ministries. The United States and the European Commission had also raised concerns about the deal.
Germany’s actions reflect a growing shift in global investment focus away from China towards other countries, such as India. The move to block the takeover of KLEO Connect demonstrates Germany’s commitment to reducing its reliance on China in strategic sectors.