Berlin is reportedly under US pressure to set limits on semiconductor chemical exports to Beijing
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The German government is considering restricting exports to China of chemicals used for producing semiconductors, as part of the US-led policy of curbing Beijing’s access to advanced technologies, Bloomberg reported, citing people familiar with the matter.
Berlin is reportedly seeking to reduce its economic exposure to the Asian country. The initiative is part of a government package of measures that would block China from key products and services needed for microchip production.
Semiconductor chips are a critical part of the global supply chain and are used in a wide range of goods from cars and refrigerators to smartphones and artificial intelligence.
If implemented, the move could damage the Chinese economy as it would restrict exports of sensitive chemicals supplied by German companies such as science and technology giant Merck, and the world’s largest chemical producer, BASF, the outlet said, citing sources with knowledge of the matter.
Germany does not have its own semiconductor industry; however, Merck and BASF supply chip-makers around the world with critical chemicals for production. Export restrictions would put at risk China’s ability to develop advanced technologies and even its capability to produce semiconductors, Bloomberg says.
German Chancellor Olaf Scholz and Economy Minister Robert Habeck are in close coordination with the US and EU on the matter, the outlet said.
Washington has been pushing for a global blockade of China’s access to key technologies, including semiconductor production. Germany is seeking to maintain a balance between relations with its allies and China, which is Berlin’s most important trading partner for the seventh year in a row.
Last month, the Netherlands agreed to restrict exports of semiconductors to China under pressure from Washington with the Dutch government, pledging to impose limits on the “most advanced” semiconductor technology.
Dutch Trade Minister Liesje Schreinemacher announced the decision in a letter to parliament, saying the restrictions will be introduced before the summer.
Germany’s initiative on export controls is at an early stage, as officials are aware that such measures would undermine business relations with China.
Beijing has repeatedly said that by imposing export restrictions, the US is infringing on free trade rules.
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