The German government has prohibited the complete takeover of satellite startup KLEO Connect by Chinese firm Shanghai Spacecom Satellite Technology, according to government sources. The decision was made by the economy ministry, which denied Shanghai Spacecom’s attempt to acquire the 45% minority stake of German company EightyLeo. Currently, Shanghai Spacecom already holds 53% of the company.

KLEO Connect aims to establish a network of more than 300 small, low earth orbit satellites by 2028, along with the necessary ground infrastructure to provide global communication services. This endeavor is similar to SpaceX’s Starlink project. The emerging space sector has become strategically important, particularly in light of the recent debate on the potential use of Starlink by the Ukrainian military during Russia’s invasion.

In related news, Elon Musk recently revealed that he refused a Ukrainian request to activate his Starlink satellite network in Crimea’s port city of Sevastopol last year for the purpose of aiding an attack on Russia’s fleet. Musk feared complicity in an act of war.

The German government has been taking a tougher stance on China over the past year. Chancellor Olaf Scholz’s administration has emphasized the need to reduce strategic dependencies on the Asian superpower. As part of this approach, Germany blocked prospective Chinese investments in two domestic semiconductor producers due to concerns over national security and the transfer of sensitive technological know-how to Beijing. However, in May, the government approved China’s state-owned shipping giant COSCO’s acquisition of a Hamburg port-based container terminal despite objections from several ministries.

It is evident that Germany is actively engaging in safeguarding its strategic interests and national security while considering its economic relations with China.