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An industrial mechanic works on a gear at MAN Energy Solutions in Augsburg, Germany.
London/Berlin
CNN
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Germany has blocked the sale of a Volkswagen subsidiary to China on national security grounds, dealing a new blow to already strained relations with Beijing. the Largest trading partner.
Volkswagen Group subsidiary MAN Energy Solutions has announced plans to sell its gas turbine business to China's state-owned CSIC Longjiang GH Gas Turbine Co., Ltd. (GHGT) in June 2023. However, a German government investigation launched in September raised concerns that China could use the gas turbines to power warships, according to Reuters.
The decision to block the deal comes just weeks after the European Union increased tariffs on electric cars from China, sparking a trade dispute with Beijing and days after China launched an investigation into EU pork prices.
German Economy Minister Robert Herbeck said at a press conference on Wednesday that Berlin welcomes investment from foreign companies, but that technology related to “public safety” must be kept away from countries “that are not necessarily friendly to us.”
At the same press conference, Interior Minister Nancy Fazer said she welcomed the government's decision, made for “security reasons.”
Germany and China traded goods worth 255 billion euros ($275.3 billion) last year, according to German government figures, but ties between Berlin and Beijing have been strained in recent years as Germany seeks to protect its domestic manufacturers and reduce its reliance on China.
Close economic ties with Russia Invasion of Ukraine Given their heavy reliance on Russian natural gas, they want to reduce the risk of a similar incident occurring in the future.
In November 2022, Germany blocked the sale of one of its semiconductor factories to a Chinese-owned tech company, citing security concerns.
A Chinese foreign ministry spokesman said on Thursday that China opposed the “politicization” of “normal commercial cooperation.”
“We hope that Germany will provide a fair, just and non-discriminatory business environment for companies from all over the world, including Chinese companies.”
MAN Energy Solutions said it respected the government's decision, adding in a statement shared with CNN that it would “start a systematic process to close down our gas turbine division over the coming months.”
The EU's additional tariffs Cost of importing an electric car The tariffs on Chinese imports will take effect on Friday for four months, and the EU has until November to decide on imposing the tariffs for five years.
“Discussions with the Chinese government have intensified in recent weeks,” the European Commission said in a statement on Thursday. For the purpose of resolving disputes.
Volkswagen, Europe's largest automaker reiterated earlier comments that the timing of the EU decision would “negatively affect the current weak demand” for EVs in Germany and the region.
“The negative impacts of this decision outweigh the potential benefits for the European, and particularly German, automotive industry,” the company added in a statement.
