Decision aims to protect technologies with potential military use; Asian country calls it “politicization” of commercial cooperation

The German government blocked the sale of a Volkswagen subsidiary to a Chinese state-owned company on Wednesday (3 July 2024), citing national security concerns.

The move directly impacts MAN Energy Solutions, part of the Volkswagen Group. In June 2023, MAN announced plans to sell its gas turbine business to Chinese state-owned GHGT (CSIC Longjiang GH Gas Turbine Co.). However, a German government review launched in September raised questions about China’s potential military use of the turbines.

In a press conference, Economy Minister Robert Habeck stressed that the country is open to foreign investment, but stressed the need to protect technologies crucial to national security. Interior Minister Nancy Faeser also supported the decision, citing security reasons.

The blockade comes amid rising tensions in trade relations between the EU and China, including a trade dispute triggered by new EU tariffs on Chinese electric vehicles.

Germany, which recorded €255 billion ($275.3 billion) in trade with China last year, wants to protect its local manufacturers and reduce dependence on the Asian giant.

This is not the first time that Germany has blocked business with Chinese companies on security grounds. In November 2022, the sale of a semiconductor factory to a Chinese company was also blocked.

In response, a Chinese Foreign Ministry spokesperson criticized the decision, calling it “politicization” of trade cooperation and calling for a fair and non-discriminatory business environment.


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