Dependence on raw materials + Regional banks in distress
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.