Chip Crisis: Foreign Minister Wadephul Postpones China Trip Due to Tensions

Diplomatic ice age between Berlin and Beijing: Foreign Minister Johann Wadephul (CDU) has canceled a trip to China planned for Monday and Tuesday at short notice. The government there had not confirmed any further sufficient appointments beyond a meeting between Wadephul and his ministerial colleague Wang Yi, explained a spokesperson for the Federal Foreign Office regarding the surprising step. This comes at a time of acute tensions, largely fueled by the new Chinese export controls for rare earth elements.

German companies are concerned about China's trade restrictions, especially concerning so-called rare earth elements. These critical raw materials are indispensable for the production of high-tech components such as semiconductors and electric motors. Their scarcity has the potential to trigger a new chip crisis that would severely impact German industry. In addition, there is another acute conflict: after the Dutch government took control of the semiconductor manufacturer Nexperia, previously managed by the Chinese Wingtech Group, Beijing initially prohibited the export of the manufacturer's products. This affects specialized chips that process data and signals in cars.

Wadephul's planned China trip would have been the first ministerial visit of the new federal government under Chancellor Merz (CDU) to Beijing. Officially, the executive regrets the now-missed opportunity for personal exchange on the "entire range of topics" and wants to intensify contact through an upcoming phone call between Wadephul and his Chinese counterpart. Berlin emphasizes the goal of diversifying supply chains while maintaining its fundamental willingness to cooperate with China.

Clear Diplomatic Signal

The postponement of the trip thus becomes a clear diplomatic signal in a phase where Germany's economic dependence on critical Chinese raw materials is encountering serious geopolitical conflicts. The spokesperson for the Federal Foreign Office underscored China's importance in influencing Russia to enable a "just and lasting peace in Ukraine." Beijing, in turn, has repeatedly reacted sharply to Germany's stance on the Taiwan issue. The government there demands strict adherence to the One-China principle, i.e., the incorporation of Taiwan, while Wadephul wants to preserve the status quo in the strait.

A few hours before the Foreign Minister's trip postponement, Federal Minister of Economics Katherina Reiche increased pressure on Beijing. The CDU politician announced that Berlin would officially lodge a diplomatic protest against China for blocking semiconductor supplies.

"The chip shortage is hitting us hard because the German economy depends on these chips," Reiche explained in Kyiv. The federal government thus highlights the acute threat posed by China's restrictive trade policy.

EU Commission Remains Open to Dialogue

At the same time, the EU Commission is intensifying its efforts for de-escalation: after Trade Commissioner Maroš Šefčovič spoke with his Chinese counterpart Wang Wentao on Tuesday, the EU Commission announced high-level technical meetings for the coming week. These will take place both in person and virtually, demonstrating that the Commission is maintaining dialogue to resolve supply chain issues.

In the current trade conflict between Beijing and the US administration under President Donald Trump, the EU is increasingly caught in the crossfire. This is considered particularly critical, as the EU imports a large portion of its critical raw materials – almost all rare earth elements and permanent magnets – from China. Dependence on these materials makes the EU vulnerable. Commission President Ursula von der Leyen (CDU) warned at the beginning of the week considering this situation: "A crisis in the supply of critical raw materials is no longer a distant risk."

(nen)