Germany Blocks Sale of Volkswagen Subsidiary to China on National Security Grounds
Germany Blocks Sale of Volkswagen Subsidiary to China on National Security Grounds
In a move that has further strained the relationship between Germany and China, Germany has blocked the sale of a Volkswagen subsidiary to China on national security grounds. The subsidiary in question, MAN Energy Solutions, had planned to sell its gas turbines business to Chinese state-owned CSIC Longjiang GH Gas Turbine Co (GHGT).
The German government initiated a review in September, which raised concerns that China might use the gas turbines to power warships, according to Reuters. This decision comes just weeks after the European Union hiked tariffs on electric vehicles from China, sparking a trade dispute with Beijing.
During a press conference, Germany’s economy minister Robert Habeck emphasized the importance of protecting technologies relevant to “public security” from countries that may not have a friendly relationship with Germany. Interior Minister Nancy Faeser also supported the government’s decision for security reasons.
Germany and China have a significant trade relationship, with goods worth €255 billion ($275.3 billion) exchanged last year. However, Germany has been working to reduce its dependence on China and protect local manufacturers. This move follows Germany’s decision to block the sale of one of its semiconductor factories to a Chinese-owned tech company in November 2022.
In response to Germany’s decision, a spokesperson for China’s Ministry of Foreign Affairs expressed opposition to the politicization of normal commercial cooperation and called for a fair and non-discriminatory business environment for all companies.
MAN Energy Solutions has stated that it respects the government’s decision and will begin the process of closing down the gas turbine division in the coming months. This latest development underscores the ongoing tensions between Germany and China as they navigate complex trade relationships and national security concerns.