German car industry urges Berlin to address anti-spy laws with Beijing

By Sarah Marsh and Victoria Waldersee

BERLIN (Reuters) – Germany must urge China to respect the confidentiality of business information in its new anti-espionage laws, Germany’s powerful autos association will say in a new position paper seen by Reuters.

The VDA is set to publish later on Monday an eight-page paper on China, the world’s largest automotive market, in response to the German government’s first ever China strategy published in July.

In it, the association which represents giants like BMW and Volkswagen as well as smaller suppliers, welcomed the fact the government had rejected a “de-coupling” from China in favour of the concept of “de-risking” – or reducing strategic dependencies on China.

But it also warned the government against intervening in business decisions, saying it should instead support diversification strategies.

The VDA noted the government strategy approved of free data exchange between China and Germany, but did not mention China’s cybersecurity laws or new anti-spying laws that ban the transfer of any information related to national security and broaden the definition of spying.

“We believe the government has the duty also to advocate in Beijing for the confidentiality of business data, to address the issue of the law’s impacts and together to look for a solution,” the association said.

The VDA noted that any legal reform to better protect German critical infrastructure should avoid singling out countries.

“Germany should not send a sign of growing investment protectionism,” the association wrote.

At a regional level, the VDA called on the European Commission to respect corporate freedom as it works on an outbound investment screening tool.

“State intervention should occur as a last resort only in exceptional cases when serious security issues can be proven,” it wrote.

(Reporting by Sarah Marsh and Victoria Waldersee, Editing by Rachel More and Mark Potter)