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Yahoo Finance Plus Germany looks to cut its reliance on China with a new $2.2 billion commodities fund
Germany plans to set up a $2.2 billion fund to support domestic raw material production, per Bloomberg.
The fund will help the country secure more of its own commodities and cut its reliance on China.
Russia's invasion of Ukraine made it clear how dependent Germany was on Russia for natural gas.
Germany aims to set up a fund worth up to $2.2 billion to support domestic production and mining of raw materials and cut off its reliance on China, according to a Wednesday Bloomberg report.
The fund could launch next year if policymakers agree on financing, the report said.
A spokesperson for the Economy Ministry of Germany confirmed to Bloomberg that it's working on a "raw materials fund to support raw materials projects at home and abroad."
With nations around the world vying for key electric-vehicle and chip-making materials, Germany's move would help it position itself to be more self-dependent, given that it relies on imports for 90% of crucial commodities, data from DIW Berlin shows.
China, for its part, leads the way as a top supplier.
Russia's invasion of Ukraine revealed just how dependent Germany was on Moscow for natural gas shipments. In 2021, Russia account for 55% of Germany's natural-gas imports, Reuters reported.
The European Union more broadly is looking to ramp up domestic refining and processing of raw materials, and has been negotiating with the US for a potential deal which would help the bloc reduce its reliance on China.
Meanwhile, China is in the midst of a rebound coming out of the pandemic, and some of Wall Street's top banks raised their economic forecasts for the country. The banks predict China's GDP will grow by roughly 6% in 2023.
Read the original article on Business Insider
