ARNSTADT, Germany — Officials in Brussels or Berlin may fret about China’s growing sway over the European economy, about the ports under its control and the high-tech firms that Chinese firms have acquired. But that is not a concern one hears in Arnstadt, a Baroque-era German hamlet where, long ago, Johann Sebastian Bach was the church organist.
It is difficult to find anyone in the city of 28,000 who is not happy, even euphoric, that a Chinese company plans to invest more than $2 billion to build a battery plant in an open field on the outskirts of town.
The project, by Contemporary Amperex Technology Ltd., better known as CATL, is believed to be the biggest example yet of a Chinese company’s choosing to build a factory from the ground up in the European Union, rather than buy an existing business.
Perhaps no place better illuminates Europe’s ambivalence toward Chinese investment, which could be summed up as: Fear the power, love the money.
There was an outcry in 2016 when a Chinese company bought Kuka, a German maker of industrial robots, and alarm early last year when a Chinese investor bought nearly 10 percent of Daimler, the German auto giant. The acquisitions inspired new laws giving European Union members more power to scrutinize foreign investment.
But when CATL announced last summer that it had chosen an industrial zone in Arnstadt known as Erfurter Kreuz for the factory, which will supply companies like Volvo and BMW with batteries for electric cars, leaders including Chancellor Angela Merkel jostled to take credit.
Germany’s conflicted view of China will be on display this week when Ms. Merkel arrives in Beijing for a three-day visit that will include a meeting with President Xi Jinping.
Ms. Merkel, who will bring along a delegation of business leaders, must walk a fine line between protecting German investments in China and appearing to tolerate Chinese repression in Hong Kong.
Proponents argue that the CATL project represents a new, more benign phase in China’s emergence as an economic superpower. Instead of acquiring European technology or gobbling up an iconic brand like Volvo, a Chinese company is bringing its own cutting-edge know-how.
And instead of destroying industrial jobs in Europe with cheap labor, German officials say, a Chinese firm is creating 2,000. That argument is especially compelling as recession looms and the German job market is showing the first signs of weakness.
“What we are doing is exactly the opposite of Kuka,” said Wolfgang Tiefensee, economics minister in Thuringia, the state that includes Arnstadt.
Mr. Tiefensee was so intent on luring CATL that, soon after hearing in 2017 that the company was looking for a site in Europe, he jumped on a flight to visit its headquarters in Ningde, a coastal city in Fujian Province, for a personal pitch.
“We are enabling the transfer of battery technology from China to Europe,” Mr. Tiefensee, a former German transportation minister, said in an interview at his office in Erfurt, the state capital. “It’s a completely new form of cooperation.”
Some analysts warn that China is pursuing a darker agenda, that CATL is part of a state-sponsored drive to dominate a strategically important technology. Batteries can account for about half the cost of an electric car. As electric vehicles become increasingly common, whoever commands the battery business will rule the auto industry.
“As China’s E.V. battery manufacturers expand abroad, manufacturers in free-market economies are up against Chinese state-backed competitors,” Anna Holzmann, an analyst of China’s industrial policies, wrote in a report last year for the Mercator Institute for China Studies in Berlin.
Founded less than a decade ago, CATL has quickly become a serious challenger to Tesla, Panasonic, LG Electronics and other makers of lithium-ion batteries for electric cars. The Arnstadt project is part of an expansion plan that could make CATL the largest producer within a few years.
Leaders in Arnstadt say geopolitical concerns are above their pay grade. They are looking forward to the tax revenue that CATL will generate, which will help build kindergartens and public swimming pools, and to a chance to be at the center of an important industry.
The mayor, Frank Spilling, said he was well aware of China’s attempts to expand its influence worldwide and of accusations of human-rights violations.
“It’s not my job to talk about that,” Mr. Spilling said on a day when the police in Hong Kong were battling pro-democracy protesters. “My job is to improve the city. The rest is at a different level. Even if I was critical, I doubt anyone would care.”
His view is echoed across the political spectrum. “There is no resistance” to the project, said Jan Kobel, a photographer and hotel owner who represents the Green Party in the Arnstadt City Council. “Everyone is welcoming it.”
There are murmurs of frustration by Mr. Kobel and others that CATL has provided Arnstadt officials with only bare-bones information about its plans, even as the scope of the project grows at a head-spinning rate.
Initially, the company planned to invest 240 million euros in the factory, but as orders have rolled in, that investment has grown to €1.8 billion, or $2 billion, according to local news reports that CATL has not disputed. Production is expected to start next year.
“It’s coming so quickly,” said Judith Rüber, who is married to Mr. Kobel and was formerly the leader of the Left Party in Arnstadt. “It will be interesting to see whether we can manage to integrate it into the community.”
A CATL spokeswoman declined to answer questions about why the company had chosen Arnstadt, or about anything else, saying the company would disclose more at the International Motor Show in Frankfurt this month.
No doubt one lure was the location near the crossroads of two major highways about 10 miles from Erfurt. CATL can easily supply companies, like BMW, that have factories in the region and are already placing orders.
Putting the factory in Arnstadt may also have been a savvy political move.
After World War II, Arnstadt wound up on the eastern side of the Iron Curtain, and many people still have bitter memories of the wrenching transition to a free-market economy after German reunification in 1990. Thousands of people were idled when the town’s main employer, the chemical industry, shut down. The unemployment rate rose to almost 27 percent.
The jobless rate has since fallen below 5 percent after companies like BorgWarner, an American auto parts maker, built factories in the same industrial zone that CATL will occupy.
But many new jobs were on temporary contracts that offered little job security. Residents are eager for any investment that will give the local economy a more solid foundation and perhaps draw back the young people who migrated west in search of better opportunity after 1990.
“People are very happy that a firm is establishing itself here that will provide jobs for their children and grandchildren,” said Martina Lang, director of the local government employment agency.
The far-right, anti-immigrant Alternative for Germany party, or AfD, a barometer of citizen fears and resentments, won 17 percent of the vote in City Council elections in May. But AfD representatives say they have no quarrel with Chinese bearing checkbooks.
“What bothers us are so-called refugees,” Rüdiger Schmitt, the mayor of the nearby village of Eischleben, said before veering into a tirade against immigrants from Syria who, in his telling, get free driver’s education while Germans have to pay hundreds of euros to qualify for licenses.
Hans-Joachim König, another AfD activist, said he was worried that lithium-ion batteries would be supplanted by another technology, rendering the factory obsolete. But at the AfD’s storefront office in Arnstadt, Mr. Schmitt and Mr. König said they had no plans to try to block the factory.
So far there is not much to block. The large fenced-in area for the factory is vacant except for a few construction vehicles and a long trench where on a recent day a handful of workers were laying cable.
A few CATL executives, both Asian and European, have been spotted at the Stadtbrauerei Arnstadt, a brewery and hotel that advertises that it is the birthplace of Weizenbier, or wheat beer. (It is not the only place to make that claim.) But municipal officials say they have had only sporadic contact with CATL representatives.
CATL has also taken over a large glass-and-steel complex near the construction site that was once used to manufacture solar cells. The previous occupant, SolarWorld, went out of business in part because of low-cost competition from China.
There was little sign of life at the complex recently. Weeds sprouted between paving stones in a parking lot with a handful of cars. When a New York Times reporter and photographer appeared unannounced, Constance Ulbrich, a CATL employee, was cordial but said she was not authorized to answer questions or allow photos.
CATL has been so low-key, said Eberhardt Pfeiffer, a retired newspaper reporter who writes a blog about Arnstadt, that most local people have not really grasped the magnitude of the project or considered the implications.
“From my point of view,” Mr. Pfeiffer said over coffee at a cafe in the town square, which has changed little since Bach’s time, “it’s not perceived as much as it should be.”
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