China is forcing German companies to disclose trade secrets in exchange for access to raw materials. This policy has led to some German companies suspending production, writes UNN with reference to BILD.
Details
China obliges German companies to transfer detailed data about their activities in order to obtain permission to import rare earth metals - materials necessary for the production of electric vehicles, turbines, and weapons. Beijing, in particular, demands production plans, customer information, photographs, and three-year forecasts from enterprises. This effectively gives the Chinese authorities a complete picture of the weaknesses of German industry.
Companies cannot refuse these conditions, as 95% of the rare earth elements used in Germany come from China. This is more than to any other EU country. Without them, automotive and mechanical engineering plants could stop.
This week, according to BILD, Volkswagen's lines were on the verge of stopping after Beijing temporarily restricted the export of some components. Of the 141 applications for the export of rare earth materials in September, the Chinese authorities approved only 19 - dozens of German firms have already suspended production.
Meanwhile, the German government admits that it does not even have basic information about what is happening. Thus, the Ministry of Economy tried to collect data through a survey of companies, but most simply did not respond.
The agency told Bloomberg that it is "using all available channels" to resolve the crisis, but there is no concrete plan to reduce dependence on China yet.
Addition
The administration of US President Donald Trump is launching a trade investigation that paves the way for the introduction of new tariffs on Chinese goods, increasing tensions ahead of the long-awaited summit of leaders next week.