China Has Gained Access To Germany's Industrial Secrets
- 25.10.2025, 21:12
Through the export of rare earth metals.
A new crisis is brewing in Germany because of China's increased control over the export of rare earth elements, without which it is impossible to produce electronics, cars, weapons and other technologies.
Now, in order to obtain a license to import these materials, German companies must provide China with detailed and confidential information: production schemes, photos of products, lists of customers, as well as data on annual output. This writes Bloomberg.
The problem is that Germany is completely dependent on China - about 95% of rare earth elements it gets from there. Therefore, firms are forced to comply with the new requirements, in effect revealing their trade secrets to Beijing.
This information gives China the opportunity to understand which industries and companies in Germany are most vulnerable, where there are bottlenecks in the supply chain, and if necessary, to exert economic pressure or even paralyze production.
The German government recognizes the threat, but has no real tools of influence, Bloomberg notes. Companies also realize that dependence on China is dangerous, but if they start looking for other suppliers of rare earth elements, it will cost them dearly - they will need to reorganize supply chains, logistics, contracts, and possibly change technologies. That is why business says: we are ready to diversify our supplies, but only if the government compensates us for these costs. The authorities, in turn, say that this is the responsibility of the companies themselves.
"Dependence makes us vulnerable to blackmail. We must diversify our trade and raw material chains," said German Chancellor Friedrich Merz.
In the meantime, small and medium-sized companies are already facing production stoppages due to delays in Chinese licenses. Large concerns have so far received their permits on time, but have refused to stockpile for fear of Chinese accusations of smuggling - Beijing is suspicious of those who order too much raw material, Chinese authorities may decide that a company is buying extra to give the materials to the Americans or to use for military purposes, and then deny a license or start inspections.
Beijing claims the new rules are needed to "protect peace" because the materials could be used for military purposes. In practice, however, it is part of economic pressure on the West, analogous to the trade sanctions that the US has previously used against China, Bloomberg notes. According to analysts, China is already collecting information that allows it to assess the vulnerabilities of the defense industry of NATO countries.