Matthias Machnig, deputy secretary in Germany's Economics Ministry, told the Welt am Sonntag newspaper that EU nations urgently needed a "legislative tool" to examine strategic takeovers and stake-holding by foreign states and, if necessary, powers to intervene.

Read more: China's hunger for German firms

Germany, together with France and Italy, had launched the legislative initiative, which also had European Commission approval and is now subject to consultations within the EU Council of Ministers and the European Parliament, Machnig said.

"It is urgently necessary that within this year we are handed a sharper legislative instrument to resist takeover fantasies or outflows of technology and know-how," he told the weekly paper.

"The EU with its innovative businesses is attractive for many around the world," he added. "Firm takeovers are rising, unfortunately often under market-distorting financial conditions."

Protectionism?

Machnig was the German delegation chief at December's ministerial conference in Brazil of the World Trade Organization (WTO), whose director-general, Roberto Azevedo, last year warned world leaders to "resist the temptation of protectionism."

Known Chinese investments in Germany had jumped from €100 million ($124 million) seven years ago to €12.1 billion last year, the Cologne-based Institute for Economic Research (IW) told Welt am Sonntag.

"In most cases less than 50 percent of the sum of transactions of Chinese firms in Germany actually became public," said the IW's Christian Rusche.

ipj/sms (Reuters, dpa)