Federal Government Unaware of Its Reliance on China for Basic Resources
A concern over Germany's economic dependence on raw materials from China, particularly rare earth elements, has been raised by the Green parliamentary group. The Federal Ministry of Economics and Energy (BMWE) has acknowledged this concern in response to a query, with Spiegel reporting on the matter.
Raw Materials and Dependence
Germany's reliance on China for rare earth compounds is significant, with more than 70% of its imports coming from China in recent years. These elements are essential for permanent magnets used in electric vehicle motors and other advanced technologies. Beyond direct imports, Germany also depends on intermediate products like magnets, special ceramics, and alloys, often sourced from China indirectly through other countries.
Potential Economic Impact
The potential economic impact of China's export restrictions could be substantial. Restrictions on rare earth exports could halt production lines in Germany's automotive and defense industries, affecting the country's export economy. This could lead to significant economic losses, particularly in sectors heavily reliant on these materials.
Moreover, Germany's increasing dependence on imports, coupled with potential disruptions from China, could further reduce its trade surplus, as observed in the first half of 2025. This reduction in surplus is a challenge for Europe's largest economy, which traditionally relies on robust exports.
China's control over critical minerals necessary for Europe's defense industry poses strategic risks. If China were to restrict these exports, it could severely impact Germany's ambitious plans to strengthen its military capabilities.
Mitigation Strategies
To mitigate these risks, Germany is likely to focus on diversifying its raw material supply chains, investing in domestic production where feasible, and exploring partnerships with other countries to reduce dependence on Chinese imports. Additionally, strategic investments in advanced manufacturing technologies could help improve efficiency and reduce reliance on specific raw materials.
However, the BMWE did not provide a quantifiable estimate of the economic damage caused by China's export restrictions on Germany. They also did not disclose specific strategies or plans to reduce Germany's dependence on critical raw materials from China. The BMWE stated that they are actively working on strategies to mitigate the impact of China's export restrictions on Germany's economy.
The extent of economic damage caused by China's export restrictions on Germany is not seriously quantifiable. The BMWE emphasized the importance of diversifying Germany's sources of critical raw materials and highlighted the need for international cooperation to address the issue.
The federal government in Berlin lacks crucial information to reduce Germany's dependence on critical raw materials from China. The BMWE expressed a commitment to finding solutions to reduce Germany's dependence on critical raw materials from China but did not provide details on the potential impacts of implementing strategies or a timeline for their implementation. The response from the Federal Ministry of Economics and Energy (BMWE) was reported by Spiegel.
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