German media: Why do German companies find it hard to get rid of their reliance on Chinese raw materials?

Why don't German companies procure raw materials from other places outside China? The German newspaper "Handelsblatt" analyzes why German companies' supply chains are highly dependent on China.

"Bureaucratic institutions operate slowly, and their thinking sometimes moves just as slowly. The high dependence of the German economy on overseas raw materials is not a new phenomenon, but for a long time, few have truly cared about it."

The article published in the German newspaper "Handelsblatt" on Friday, November 07, began with this statement. The article has the title of a question: "Why don't German companies procure lithium from their own country?" (Warum besorgt sich die Wirtschaft kein Lithium aus Deutschland?)

The article continued: In the market for key raw materials, China is gradually increasing its share, slowly seizing market control. Now, the German economy's dependence on certain raw materials has reached 60%, 70%, 80%, or even close to 100%."

Author Julian Olk then pointed out that this situation is not due to the scarcity of raw materials: "There are rich reserves of raw materials around the world, including South America, Africa, other parts of Asia, and even in Germany itself, such as lithium. The problem is whether they can be obtained smoothly. So, why don't German companies directly procure raw materials from these places? Why do they always expect the government to step in?"

The article then provided an answer: "The reason is that most companies have not really realized the changes in the times. The nature of enterprises is to pursue short-term profit maximization. When raw materials are available, they naturally tend to choose Chinese suppliers with the best price. At the same time, companies often ignore geopolitical risks: over-reliance on Chinese raw materials means facing the possibility of being forced to compromise or being controlled at critical moments."

Source: DW

Original: www.toutiao.com/article/1848234717299716/

Statement: This article represents the views of the author."