German authorities have rejected a Chinese company’s attempt to acquire satellite startup KLEO Connect. The cabinet approved a resolution by the economy ministry to prevent Shanghai Spacecom Satellite Technology, which already owns 53% of the business, from acquiring the 45% minority ownership held by the German company EightyLeo. This decision comes as Germany takes a more aggressive stance against China, warning about the need to reduce strategic reliance on the Asian powerhouse.

KLEO Connect aims to build a network of over 300 tiny, low-earth orbit satellites that will be fully operational by 2028, alongside the necessary base infrastructure to provide global communications services. The decision to block the acquisition is motivated by concerns over national security and the potential transfer of critical technological information to Beijing.

This move follows Berlin’s rejection of a Chinese investment in two local semiconductor firms in November for similar reasons. Germany is increasingly cautious about Chinese investments as it seeks to protect its own national interests and mitigate risks associated with the transfer of sensitive technology.

Despite opposition from various departments, the German government approved COSCO, a state-owned shipping company in China, to purchase a portion of a container terminal at the Hamburg port in May. However, both the European Commission and the United States have issued warnings against this agreement, underscoring the global concerns surrounding Chinese investments.

Germany’s actions reflect a broader trend among Western countries seeking to safeguard their critical industries and technologies from foreign influence, particularly from countries like China. National security has become a top priority, and governments are becoming more vigilant in scrutinizing foreign investments, especially in sectors that are considered strategically important.