In recent years, the rapid growth of Chinese influence in various sectors has caused considerable unease among German companies. This unease is especially prominent in the technology and energy sectors, where Chinese companies such as Huawei and ZTE are making significant strides. The German government’s recent decisions to limit the use of Chinese components in critical infrastructure highlight the increasing mistrust and the potential global economic repercussions.
Chinese Influence and German Technology
The German Interior Ministry (BMI) announced that by the end of 2026, components made by Chinese technology companies Huawei and ZTE “must no longer be used” in building up the country’s next-generation 5G mobile networks. Existing components must be replaced by the end of 2029. This decision underscores the government’s concern about the potential security risks posed by these companies, which are viewed as having close ties to the Chinese government.
5G Networks: Critical Infrastructure
5G networks are considered critical infrastructure in Germany because they are crucial for sectors such as energy, transportation, healthcare, and financial services. The ban on Chinese components reflects the growing suspicion towards Chinese firms and their potential to exert undue influence over national infrastructure.
Collaboration in the Energy Sector
The collaboration between Luxcara, an independent asset manager based in Hamburg, Germany, and Chinese company Ming Yang to build turbines for a wind project off the German coast has also raised eyebrows. Energy supply is another area considered critical infrastructure, and the partnership with a Chinese company in this sector has intensified the debate about reliance on Chinese technology.
Economic Implications
The growing Chinese influence and subsequent restrictions have significant economic implications for Germany and Europe as a whole. The dependence on Chinese technology for critical infrastructure components, coupled with the mistrust towards these technologies, creates a complex dynamic that affects the broader European economy.
Impact on German Companies
German companies are facing a dilemma. On one hand, Chinese technology offers advanced solutions and competitive pricing. On the other hand, there is a significant risk associated with potential cybersecurity threats and undue influence from the Chinese government. This situation forces German companies to reconsider their partnerships and supply chains, leading to increased costs and potential delays in technological advancements.
Broader European Economic Impact
The European economy, which relies heavily on seamless and secure infrastructure, is also affected. The restrictions on Chinese components may lead to supply chain disruptions, increased costs, and delays in infrastructure projects across the continent. Furthermore, the mistrust towards Chinese technology can lead to a broader geopolitical rift, affecting trade relations and economic stability in the region.
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Reasons Behind the Mistrust
The mistrust towards Chinese companies is rooted in several factors, including economic practices, data security concerns, and geopolitical tensions.
Economic Practices
According to the Kiel Institute for the World Economy (IfW) in Germany, more than 99% of China’s listed companies receive direct state subsidies and enjoy easier access to critical raw materials, forced technology transfer in joint ventures, and assistance in public procurement processes. These practices give Chinese companies a competitive edge, making it difficult for European companies to compete on a level playing field.
Data Security Concerns
Data security is another major concern. Manufacturers usually operate their own control centers to monitor the wind farms they build. As long as these control centers aren’t located in Germany, there is always a risk of unwanted influence on operations from abroad. This risk is particularly pertinent in the case of Chinese technology, given the perceived close ties between Chinese companies and the government.
Impact on the Geneva Convention and War Laws
The growing influence of Chinese technology and the resulting mistrust have broader implications beyond the economic sphere. They also affect international laws and conventions, including the Geneva Convention.
Changes in War Norms
The mistrust towards Chinese technology can lead to changes in the norms of war-making and the interpretation of the laws of armed conflict. For example, if countries start to adopt more aggressive stances towards Chinese technology in critical infrastructure, this could lead to a redefinition of what constitutes acceptable collateral damage in military operations.
International Legal Order
The actions of countries like Germany in limiting Chinese influence also challenge the existing international legal order. If more countries follow suit, this could lead to a significant shift in the global balance of power and the norms that govern international relations and conflicts.
Growing influence
The growing influence of Chinese technology companies has created a sense of insecurity among German companies and has broader implications for the European economy and international laws. The mistrust towards Chinese technology, driven by economic practices, data security concerns, and geopolitical tensions, necessitates a reevaluation of partnerships and supply chains. This dynamic not only affects economic stability but also challenges the existing norms and conventions that govern international relations and conflicts.
References
- Kiel Institute for the World Economy (IfW). (2022). “Subsidies and Economic Practices in China.”
- German Interior Ministry (BMI). (2023). “Announcement on Chinese Components in 5G Networks.”
- Handelsblatt. (2023). “German Companies and Chinese Technology: A Complex Relationship.”
- DW. (2023). “Luxcara and Ming Yang Partnership: Implications for German Energy Sector.”
- European Commission. (2022). “Impact of Chinese Technology on European Infrastructure.”
