The German government is considering restricting exports to China of materials used to make semiconductors as part of its new strategy towards Beijing, Bloomberg reported on Thursday, citing Reuters.

The proposal is part of a larger package of measures being discussed by the German government aimed at cutting off China’s access to goods and services needed to make advanced semiconductors, according to sources familiar with the discussions.

If approved, the measure would prevent German companies such as Merck KGaA and BASF from selling some of their chemicals to China, according to sources cited by Bloomberg on condition of anonymity.

The news comes as Chancellor Olaf Scholz takes a more aggressive approach to Beijing, but still tries to reconcile Germany’s vast economic interests in China with Berlin’s national security interests amid fears that Xi Jinping’s government may be supplying arms to its Russia invasion of Ukraine.

Relations between Europe and China have soured recently, with Chinese President Xi Jinping’s visit to Moscow last month, a turning point, during which he spoke of his friendship with Vladimir Putin, although he assured that the Chinese government was “impartial” to the conflict in Ukraine.

But since last November, Olaf Scholz’s government has blocked two moves by Chinese companies that wanted to invest in German semiconductor manufacturers.

Berlin’s leadership used its veto power to buy the Dortmund factory of Silex, the Swedish subsidiary of the Chinese group Sai Microelectronics, and the Beijing financial company’s investment in ERS Electronic, a Bavarian firm.

Germany is increasingly concerned about the dependence of its economy on China

Scholz’s government is working on a new China strategy to reduce dependence on the Asian superpower, a vital export market for German goods.

Last November, Scholz became the first leader of the G7 most industrialized countries to visit Beijing since the COVID-19 pandemic. However, a number of misunderstandings remain, as Germany insists on expanding the access of German companies to the Chinese market, but is also concerned about Chinese investment in its critical infrastructure.

After returning from a recent official visit to China, German Foreign Minister Annalena Berbock described the visit as “more than shocking,” during which she exchanged tense remarks at press conferences with Chinese Foreign Minister Qin Gang and a top Chinese official. of diplomacy, Wang I.

“Part of it was really more than shocking,” Burbock described his visit to China in the Bundestag, without elaborating.

For Germany, she added, China is a partner, a competitor and a systemic rival, but now she has the impression that “the aspect of a systemic rival is growing more and more.”

China is Germany’s largest trading partner, but this does not mean that Beijing sees Germany as its most important trading partner, the head of German diplomacy said.

On Friday, just two days after Burbock’s comments about his visit to China, German Finance Minister Christian Lindner in turn sent a message of distancing himself from Beijing, but warned that the German economy’s dependence on China could not change overnight .