German Government Bans Sale of Gas Turbine Factory
China Seeks Core Technology for Fighter Jet and Warship Engines
Even Mobilizing Civilian International Students for Semiconductor Smuggling
A gas turbine of Volkswagen's subsidiary 'Man Energy Solutions,' whose sale to China was prohibited. [Image source: Man Energy Solutions official website]
Volkswagen's plan to sell its subsidiary's gas turbine production plant to a Chinese company was thwarted after the German government refused to approve the deal. The German government cited security reasons without providing specific details, but it is analyzed that they viewed the gas turbine production technology as having a high potential for military misuse. As the Chinese government attempts various methods to acquire core propulsion engine technologies for fleets and fighter jets, it is expected that vigilance among Western countries such as the United States and Europe will intensify in the future.
German Government Blocks Sale of Volkswagen Subsidiary's Gas Turbine Division
German authorities denied the sale of the gas turbine business unit of Volkswagen's subsidiary, Man Energy Solutions, earlier this month. Volkswagen had originally announced plans last June to sell the business unit to the Chinese state-owned enterprise CSIC Longjiang GH Gas Turbine, and German authorities began reviewing the case in September.
The German government did not disclose specific reasons but stated that the sale was blocked due to security concerns. Robert Habeck, Germany's Minister for Economic Affairs, said regarding the denial, "Technologies related to public security must be protected from countries that may not always be friendly to us." Nancy Faeser, Germany's Minister of the Interior, also expressed support for the decision, stating, "I welcome this decision for security reasons."
The security concerns mentioned by German officials are interpreted as the potential misuse of civilian technology for military purposes. Previously, there were concerns within and outside the German government that if the gas turbine division were sold to China, the Chinese military could repurpose the technology to power naval fleets.
The Chinese Ministry of Foreign Affairs protested the decision, stating in a press release, "China opposes the politicization of normal commercial cooperation," and added, "We hope Germany will provide a fair and non-discriminatory business environment for companies worldwide, including Chinese enterprises."
China's Persistent Attempts to Acquire Core Technologies Raise Global Concerns Over Technology Leakage
The reason for the German government's sensitive reaction is that China has been continuously attempting various technology leaks to acquire core technologies for naval ship engines.
According to the British BBC, in April this year, German prosecutors arrested two German men and one woman on charges of leaking military secrets, including naval engine technology, to China. Prosecutors stated that these individuals were recruited by China's Ministry of State Security in 2022 and collected various German military technologies over two years to pass on to China.
Among the three suspects, the two main perpetrators are reportedly a married couple who ran a company in D?sseldorf, a city in western Germany, while continuing the technology leaks. The other man, a German fluent in Chinese, is accused of facilitating communication between the Chinese government and the couple. German prosecutors revealed that they received funding from the Chinese government and were conducting research projects aimed at enhancing the Chinese navy's military capabilities.
The Chinese government has caused diplomatic friction not only with Germany but also with Western countries and Russia over technology leaks. According to The New York Times (NYT), China imported AL-32F engines used in Russia's Su-27 fighter jets to develop the J-20 fighter jet engine, illegally copied some of them, and later faced production setbacks when Russia restricted engine exports.
Regarding semiconductors, which are now used in almost all military weapons, there have been cases of smuggling involving even civilian students studying abroad. According to The Wall Street Journal (WSJ), a 26-year-old Chinese university student studying in Singapore smuggled six Nvidia semiconductor chips in her bag during last autumn break and received $200 (about 140,000 KRW) per chip for transportation. The student said, "I am happy to do something for my motherland and earn some money. There is no reason not to smuggle."
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