Such conditions have given rise to concerns regarding potential acquisitions by cash-flush Chinese entities. These fears have been significant enough to prompt the EU’s competition commissioner, Margrethe Vestager, to recommend that member-states directly purchase shares in vulnerable domestic tech companies operating in sensitive spaces such as telecoms and semiconductors.

The irony between Vestager’s comments and the function of her office signals Europe’s willingness to demonstrate explicit pushback against Chinese takeovers, particularly during times of calamity when valuations are depressed. During the global financial crisis and the subsequent Eurozone crisis, Chinese investment in Europe accelerated among some of the hardest-hit economies in the region, including Greece, Italy, Spain, and Portugal. Other parts of Europe, including the sub-region of Scandinavia and industrial powerhouses such as Germany, the United Kingdom, and France have also seen their fair share of the Chinese deluge of foreign direct investment (FDI).

This time around, the forecast of Chinese activity assumes that much of the capital will be deployed among mature tech firms with significant research & development capabilities. As the US-China trade war drags on, Europe will be a battleground for any possible partition of the global tech ecosystem that compels a choice between doing business with American or Chinese firms.

Beijing’s decision calculus in pursuing European tech firms is a maneuver designed to pre-empt any US-led pressure to boycott, blacklist, and/or impede EU tech firms from engaging with China, while it gradually weans itself from foreign supplier reliance. As home to some of the most valuable companies in areas such as 5G telecommunications and robotics, Western Europe’s expertise is perhaps the last remaining option for China to ensure technology transfer keeps the country apace in its tech supremacy ambitions.

At the heart of China’s aggressive buying spree is two of the country’s signature economic agendas: The Belt and Road Initiative (BRI) and the “Made in China 2025” plan. The former prizes the integration of Europe within a reinvigorated trade network spanning four continents, overseen and funded by a mix of Chinese parastatals and private enterprises. In the past decade, China’s acquisitions have covered a sizable amount of strategic assets, such as utilities, maritime facilities, and airports.

The other government agenda seeks to redefine the “Made in China” label, by shifting the focus of Chinese production from low-cost activities to high-tech manufacturing independence. Driving this agenda is Beijing’s desire to insulate itself from the obstacles associated with Western suppliers, many of whom have acquiesced to government pressure to pare exports destined for China.

With state-owned enterprises leading the charge into Europe, China’s intent is transparent, and by all accounts, a legal foray via Europe’s capital markets. Thus, any meaningful attempt to safeguard European assets from foreign acquisition will necessitate a robust policy response beyond an informal and limited state-by-state share repurchase program.

One such policy response includes emulating America’s Committee on Foreign Investment in the United States (CFIUS), which incorporates a vast number of stakeholders to weigh-in on the implications of foreign investments. With populist governments in Europe well-entrenched and in favor of protectionist measures, the adoption of CFIUS may offer a rare chance for consensus between the likes of Northern Europe, Germany, France, and their populist colleagues.

Founded nearly 45 years ago, CFIUS now serves as the most meaningful deterrent and policy tool available in America’s protectionist repertoire. By scrutinizing potential investments and acquisitions in the realms of defense and trade, considerations are broadly explored prior to finalizing, or in some cases, ordering divestment of assets deemed critical to the state or union. The Trump administration’s willingness to leverage CFIUS has already contributed immensely to China’s investment outlook, with Chinese FDI outflows to America having decreased by nearly 90% between 2016-2018.

Though a CFIUS-like mechanism may not garner the widespread acceptance of all EU member-states, the US system still offers a viable model for individual member-states to adopt, provided they are willing to incorporate additional screening of investments.

In the absence of such multilateral cooperation, endogenous political pressure could prove a useful supplement to modulating the investment climate and reception of China’s interests. Lawmakers within EU member-states have been pivotal to lobbying and introducing legislation to their individual governments and Brussels to reject takeover bids led by consortiums of Chinese investors.

Uproar from politicians and state-led investment is a start, but hardly a sustainable endeavor. Should M&A activity continue its drought among alternative investors, the opportunity for China to make aggressive acquisition with fewer bidders is one ramification that will long outlast COVID-19.