China's export ban: German companies in the production crisis!

China's export ban: German companies in the production crisis!

China's introduction of new export restrictions on rare earth metals has put the global economy in a difficult position. German companies are particularly affected, especially in the automotive industry. According to that Mercury Many manufacturers are already having to reduce their production because the measures are leading to significant material shortages.

China controls nearly 70 percent of rare earth mining worldwide and an impressive 90 percent of refining processes. These raw materials are crucial for many technological applications, especially for electric motors and battery cells, the main consumer of which is the automotive industry. Companies have built up inventories, but they are now almost completely used up. According to Jens Eskelund, President of the European Chamber of Commerce in Beijing, the situation is “very tense”.

Export controls and their effects

The export controls came into force at the beginning of April 2025 and affect seven key rare earths and rare earth magnets. In order to obtain materials, companies must submit applications, which are carefully examined by the Chinese authorities. These additional hurdles further exacerbate the situation as companies must dedicate time and resources to obtain the materials they need.

The effects are not just limited to the automotive industry. The defense industry, medical technology, electronics and offshore wind turbines are also affected by the bottlenecks. China's strategy, led by its previous imposition of export restrictions on other essential raw materials such as tungsten, gallium and antimony, shows how critical the West's dependence on this country is.

Reactions and future measures

Experts warn that Western governments and companies have underestimated the need to increase their own independence in rare earth supplies. However, the European Union's Critical Raw Materials Act, which aims to promote independence in supply chains, is taking years to implement. The urgency is heightened by China's past use of export restrictions as political leverage.

Given these circumstances, companies and governments must develop alternative strategies to reduce dependence on China. It is to be expected that this pressure on German industry will continue and the search for new sources of raw materials will become more intensive. The Mirror highlights that the pressure on the industry is growing and the challenges will continue to increase in the coming period.