From Financial Times By Peter Ehrlich in Nanjing

Beijing has no intention of buying stakes in strategically important companies in Germany or other western countries in the near future, members of a German delegation visiting China have said.

During talks with Angela Merkel, Germany’s chancellor, on Tuesday the Chinese government made clear that the country was currently looking chiefly for financial investments, members of the delegation told FT Deutschland, the Financial Times’ sister paper.

China has $1,300bn (£644bn, €951bn) in foreign exchange reserves, a small part of which is to be put in a separate government investment fund in search of higher returns than at present.

The new investment fund will have about $200bn under management, but a large part of that will consist of existing investments in Chinese state companies listed overseas.

During the talks, China acknowledged Berlin’s concerns about the purchase by foreigners of local companies, German officials said.

At a summit in Meseburg, the German government last week decided to make use of a special provision that could block foreign investments on national security grounds, but the details of these plans are still to be finalised.

Many in Germany fear that involvement through state-controlled companies could give rising economic powers such as China and Russia too big an influence over the German economy.

China Investment Company, the state-owned investment group, recently acquired a stake in Blackstone, the US private equity group that holds a stake in Deutsche Telekom.

Ms Merkel on Tuesday said it was important for investment conditions to be comparable and that, in general, openness towards foreign investors was important.

During the visit, Ms Merkel also sharply criticised China for copying German products.

This was a “relatively big problem”, she said.

Copyright Fund China 2008.

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