- Raw materials: Germany remains dependent
- Bank failures in Henan only the tip of the iceberg
- Sinolytics.Radar: more lockdown = less growth
- Trade dialogue scheduled between Brussels and Beijing
- Companies kowtow less often
- Protest over Taiwan representative at Abe’s funeral
- Record hydropower production
- India could soon have a bigger population than China
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Half of the magnesium processed in Germany comes from China. The dependence on China for rare earth elements is similarly high. And indirectly much higher, because the German industry is dependent on primary products from other EU countries, which obtain even more raw materials from the Asian world market leader. Nico Beckert analyzes why it is so difficult to get away from the proven supplier. As long as everything is fine on the global political stage, it doesn’t make sense to accept higher costs for diversification. The competition is not doing it either. A far-sighted risk management would be in order here.
The question of actual risks also arises for small banks deep in the countryside. The payment defaults in Henan are just the tip of the iceberg, analyzes our team in Beijing. The people there are already boiling with rage because customers have not received their money for days. For a long time, the headquarters in Beijing simply overlooked the problem of very small credit cooperatives. But in fact, they have a major role in the system, providing capital for small and medium-sized businesses. Bank failures are now also a side effect of the bitter COVID medicine the government has to deal with.
Finn Mayer-Kuckuk
Feature
Germany remains dependent on Chinese raw materials
For decades, it was unthinkable that Russia would eventually stop supplying gas to Germany. Now Vladimir Putin has cut gas supplies. German ministries are developing emergency plans for the winter. Not only private households are affected, but also the industry, which will almost certainly have to curb production.
This also draws attention to other dependencies: China is the largest supplier of important raw materials such as rare earth elements and magnesium. For other raw materials, the People’s Republic is among the top 5 exporters worldwide. There is now growing concern among managers, economists, and politicians about the consequences of a conflict with China, which would hit Germany hard economically in several respects.
Half of Germany’s magnesium imports and 45 percent of its imports of rare earth elements come from the People’s Republic, according to a new study by the Ifo Institute. The metals are used in important future technologies such as fuel cells, electric motors, wind turbines, digital technology, and robots.
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