Berlin plans to cut to 10 percent the threshold at which it can launch national security probes of stake purchases by non-European companies in German firms, business newspaper Handelsblatt reported on Sunday.
The decision follows years of mounting concern at the risk posed to the German economy by cash-rich Chinese investors buying stakes in strategically important companies, gaining access to valuable know-how and inside knowledge.
The takeover of robotics firm Kuka by China's Midea in 2016 spooked Germany, as did the surprise purchase earlier this year of a 9.7 percent stake in Daimler by Chinese carmaker Geely.
Ministers agreed the trigger threshold for probes of stakes in companies in areas relevant to national security should be cut from the current 25 percent, Handelsblatt said.
In an interview with Reuters on Friday, Economy Minister Peer Altmaier said rule changes were due.
The move comes amid mounting Western concern at the security implications of investments by an increasingly assertive China.
The United States has been urging European countries not to buy advanced telecommunications infrastructure from China's Huawei, for fear it could plant technology accessible to the Chinese state. Huawei has denied it would ever do this.
