Germany plans to toughen rules on non-EU share purchases and acquisitions of its strategic companies, a report said on Sunday, amid growing disquiet about takeovers by Chinese firms.

Chancellor Angela Merkel's cabinet plans to approve the law change on Wednesday and send it to parliament, the Handelsblatt business daily said, without citing its sources.

The update of the Foreign Trade Regulation would allow the German government to review or bloc foreign purchases of stakes as low as 10 percent in such companies, down from 25 percent now.

The rule would apply to "security relevant" companies that are crucial to Germany's defence or "critical infrastructure", including many high-tech and power companies but also large food producers.

Germany and other European Union member states have voiced growing concern in recent years as Chinese companies have bought up, or purchased controlling stakes in, airports, harbours and high-tech firms.

Chinese appliance giant Midea in mid-2016 took over German industrial robotics supplier Kuka, sparking alarm in Germany about valuable knowhow being transferred abroad.