China has answered the European Union’s latest sanctions round by placing 14 EU entities on its export control list, the Ministry of Commerce announced on July 24. Among them are Germany’s largest arms producer, Rheinmetall AG, Italy’s electric motor manufacturer Lafert SpA, and the French drone developer Cavok UAS.
The 21st sanctions package from Brussels targeted 14 companies based in mainland China and Hong Kong, which the EU accused of helping Russia circumvent export controls on microelectronics, machine tools and semiconductor manufacturing equipment. Beijing’s answer was 14 for 14, effective immediately.
Chinese exporters are now barred from shipping dual-use goods to the listed firms. The prohibition also reaches beyond China’s borders: organizations and individuals anywhere are barred from transferring or supplying Chinese-origin dual-use items to these entities, with exceptions requiring case-by-case approval.
The significance goes well beyond a single company. Rheinmetall is the engine of Europe’s rearmament drive—the firm whose order books and share price have become the index of the continent’s militarization. Its exposure to Chinese supply chains is a lesson in physical economy. Europe has spent three years discovering that it cannot arm itself without energy it no longer produces cheaply; it is now discovering that it cannot arm itself without minerals, components and electronics it does not produce at all.
The sanctions weapon has come back like a boomerang.
