BERLIN -- Germany is considering introducing measures to limit how far foreign state-owned funds can invest in its firms, Chancellor Angela Merkel said on Monday.

"We cannot react as if these were completely normal funds with privately-invested cash," Merkel said after a meeting of her Christian Democrats (CDU) in Berlin.

State-owned funds were not necessarily interested in maximising the return on capital and their investment might be motivated more by a thirst for political influence, she said.

The German government had to react appropriately to this new challenge and "this could happen via legal measures," she added.

Leading politicians in Germany's ruling coalition have expressed concerns about the growing interest in its domestic firms shown by China and Russia.

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Merkel said any new measures need not necessarily be limited to the strategically-important defence industry.

Governments that closed off their markets to investment by German companies should be treated differently to those which encouraged free access, she added.

A top economic adviser to the German government said last week he opposed introducing new forms of protectionism to stop foreign countries wielding excessive influence over domestic companies.

"I do not think much of sealing off the German capital market," Bert Ruerup, who heads the government's panel of economic advisers, told the Handelsblatt newspaper.

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