Germany has blocked the sale of Volkswagen subsidiary MAN Energy Solutions’ gas turbines business to Chinese state-owned CSIC Longjiang GH Gas Turbine Co (GHGT) on national security grounds, as reported by Hanna Ziady and Nadine Schmidt for CNN.

The German government’s review, initiated in September, expressed concerns that China might use the turbines to power warships. This decision adds tension to Germany’s already strained relationship with China, its largest trading partner.

The move follows the European Union’s recent decision to increase tariffs on Chinese electric vehicles, which prompted China to investigate EU pork prices, escalating a trade dispute.

During a press conference, German Economy Minister Robert Habeck emphasised the need to protect technologies crucial to public security from potentially unfriendly nations, despite welcoming foreign investments. Interior Minister Nancy Faeser supported the decision, citing security reasons.

In 2023, Germany and China traded goods worth €255 billion ($275.3 billion). However, Germany’s relationship with China has deteriorated as Berlin seeks to safeguard local manufacturers and reduce reliance on Chinese trade. This latest development reflects Germany’s broader strategy to scrutinize and regulate foreign investments that could pose national security risks, particularly from countries with which it has complex diplomatic ties.