German companies trade industrial secrets for Chinese rare earth access

German manufacturers are reportedly exchanging sensitive industrial data for limited access to China’s rare earth supplies, raising concerns over national security and industrial sovereignty.

To secure a six-month license to import critical rare earth materials, German companies are submitting detailed proprietary information, including production forecasts, supply chain layouts, and customer lists. This practice spans various sectors, notably defence contractors, automotive suppliers, and precision toolmakers.

The German government has expressed alarm over these disclosures. Officials reportedly had to request information from companies about what data was being shared, with many firms failing to respond. This lack of transparency has left policymakers in the dark about the full extent of the information being transferred.

Smaller manufacturers are particularly vulnerable, with some already ceasing operations due to the pressures of complying with Chinese licensing requirements. Larger corporations are participating in these arrangements to maintain their supply chains and avoid disruptions in production.

The situation underscores the growing geopolitical leverage that China holds over global industries reliant on its rare earth resources. These materials are essential for producing a wide range of high-tech products, including electronics, renewable energy technologies, and military equipment.

The German government’s apparent lack of oversight and control over these transactions raises critical questions about the balance between economic necessity and national security. As the global competition for rare earths intensifies, the need for robust policies to protect sensitive industrial information becomes increasingly urgent.