ARD Fernsehen, a German TV station, reported that one of its investigative programs, “The Munich Report” and the German newspaper Welt am Sonntag (“World on Sunday”) discovered the role that German technology has been playing on Chinese warships.

German manufacturers have developed and even built a sizable portion of the engines that power the Chinese Navy’s warships. The MTU Friedrichshafen, a manufacturer of internal combustion engines, and MAN, the French subsidiary of Volkswagen, are involved. One can find detailed information about the German engine and turbine manufacturer’s supplies to China in the publicly accessible database of the Stockholm International Peace Research Institute (SIPRI). MTU is said to have been a regular supplier of China’s most advanced Brigadier III class destroyers until at least 2020. The supply comes through the circuitous route of licensed production in China. MAN and MTU assured the Munich Report and Welt am Sonntag that they have always complied with export control regulations. According to MTU, the business of delivering submarine components to China “completely stopped” after the Song-class submarines were equipped. The company “has never signed a contract with the Chinese Ministry of Defense or armed forces itself.” The engines installed in the Brigantine III-class destroyers, as SIPRI calls them, do not require an export license because they are so-called dual-use goods. That is, the engines can also be used for civilian purposes.

This year, the Chinese Navy is putting more of its Brigantine III-class destroyers into service. The most recent is the destroyer Kaifeng, which was unveiled in July on the 100th anniversary of the founding of the Chinese Communist Party (CCP).

MTU and MAN can claim that their deliveries are permitted. The EU imposed an arms embargo on China after the Tiananmen massacre in 1989, but the embargo’s binding effect is limited. Sebastian Rossner, a Cologne-based lawyer and export expert, told Germany’s ARD public broadcaster, “Because the EU arms embargo on China was not formally decided in accordance with the European treaties, certain exports of ship engines may also be permissible (if intended for the Chinese navy).” He added, “If you want to change this, the EU must either amend the Dual-Use Regulation or formally impose an arms embargo.”

Source: Radio France International, November 7, 2021
https://rfi.my/7tZR

Major Taiwanese news network China Times recently reported that, 37 different countries including Switzerland, the European Union, and Japan have stopped granting the Generalized System of Preferences (GSP) to Chinese goods. After they did so, the General Administration of Customs of China issued an announcement to stop issuing GSP certificates of origin (Form A) for the export of goods to the aforementioned 37 countries. The only countries that still retain China’s GSP treatment are Norway, New Zealand and Australia. For goods exported to these three countries, companies can still apply for a GSP certificate. The Generalized System of Preferences is a universal, non-discriminatory, and non-reciprocal preferential tariff system in which developed countries (beneficial countries) grant exports from developing countries (beneficiary countries). It is based on the most-favored-nation tariffs and further provides tariff reductions, exemptions, or even full tax exemptions in order to help the economic development of developing countries.

Source: China Times, November 2, 2021
https://www.chinatimes.com/cn/newspapers/20211102000132-260203?chdtv