The debate centers on the Chinese company Yangzhou Yangjie Electronic. The European Union included the company in its twentieth sanctions package against Russia because parts from the concern are said to have been used in Russian drones and flying bombs deployed by Moscow against Ukraine.
Nevertheless, the European Commission now proposes allowing certain transactions with the Chinese company for nine months. According to Brussels, this transition period should prevent European car manufacturers from running out of important chips.
Sanctions list
The chipmaker has become more important for European car companies in recent years. This happened after other Chinese suppliers were hit by sanctions or trade measures earlier. As a result, dependence on Yangzhou Yangjie Electronic increased.
Promotion
The European Commission stresses that the company remains on the sanctions list despite the temporary exception. The proposal aims to give European manufacturers time to find other suppliers and avoid production disruptions.
The proposal can only proceed if all EU countries agree. Diplomats and policymakers are discussing the matter against the backdrop of a broader European debate about the economic relationship with China.
Strategic sectors
Brussels has been working for some time on plans to reduce dependence on Chinese industry and technology. European policymakers are concerned about cheap Chinese imports and the vulnerability of European companies to Chinese export restrictions on critical raw materials.
The European Commission is considering new trade measures and additional protection of strategic sectors such as technology, energy, and the automotive industry. It is also exploring ways to better address state-supported Chinese production.
Trade relationship
Within the European Union, there are differences of opinion about how strict the policy toward China should be. Some EU countries fear that tougher measures could cause economic damage or put further pressure on the trade relationship with Beijing.
Especially Germany plays an important role in this regard. The country traditionally tries to avoid trade conflicts with China but at the same time sees that European industries have become increasingly dependent on Chinese technology and raw materials.
The issue surrounding the Chinese chip manufacturer, according to those involved, shows how difficult it is for the European Union to expand sanctions against Russia without simultaneously harming its own economy.