China Demands Data Disclosure from German Firms, โขRaising Espionage and Supply Chain โConcerns
Recent reports โindicate that China is implementing new export regulations that are compelling German companiesโ to disclose sensitive business information,โฃ sparking concerns over potential espionage andโ the โstrengthening โofโ China’sโ control over criticalโฃ supplyโฃ chains. Theโฃ regulations,ostensibly aimed at safeguarding “world peace” by controlling the exportโ of key minerals,are โrequiring extensive data submissions from companies seeking licenses to export goods to China.
Aโค September โsurveyโค by the โขEuropean Chamber of Commerce in China (EUCCC) revealed a meaningfulโ bottleneck in the licensing โคprocess. Out of 141 export applications from 22 companies, only โ19 were approved, leading to โฃ46 production halts in September and potentially tenโค more โby December. While the German embassy in Beijing provided a โpriority list toโ expedite approvals for larger companies, particularly automotive manufacturers, smaller firms lacking lobbying power were reportedly left behind.
The coreโค issue liesโค in the detailed information China is demanding. โฃAccording to reports, the requirements โeffectively force companies to reveal details about their production needs, end-users, and potential military applications of exportedโ materials. Beijing hasโ even expressed suspicionโฃ towards companies ordering beyond their stated production requirements, alleging potential smuggling to โmilitary entitiesโ or the United States.
This data collection is raising alarm bells among security analysts. Rebeccaโฃ Arcesati, an analyst at the โGermanโข Mercator Institute for China Studies (Merics), suggests โฃthe gathered informationโ could “cement the dominanceโ of Chinese companies” and provide Beijing with leverage overโข Europeanโข industries. She further warns that it allows โChina โto gainโ insight into the defense industries of NATO countries and their interconnectedness.Specifically,Germany is heavily reliant on โฃChina for rare earth minerals – 95% of โGermany’s supply โฃoriginates there,exceeding that of any othre EU nation.
The โคGermanโ government โคacknowledges the โฃproblem.The Ministry of Economic โขAffairs โreportedly sent questionnaires to companies to assess the scope of dataโ collection andโฃ gather comparable โฃinformation. However, these questionnaires โขlargely went unanswered, and subsequentโฃ meetingsโ with company โrepresentatives yielded โคlimited progress. โThe Ministry faces political hurdles in imposing binding data disclosureโ obligations on companies.
Industry representatives โexpress frustration withโฃ the lack of support. The Federation ofโ German โIndustries (BDI) reportedly requested a meeting withโ Minister Katherina Reiche in the summer, butโฃ their request went unanswered.The Ministry of โขEconomicโข Affairs โmaintains it is in “close and regular contact” with affectedโค companies and associations.
Despite promises of reducing bureaucracy, German companies are findingโ themselvesโค overwhelmed โby the newโฃ regulations, โคraising concerns about the long-term impact on their competitiveness โand the security ofโ sensitive business information.
