The Chinese government has criticized the German government's veto against the sale of parts of the gas turbine business of Volkswagen subsidiary MAN Energy Solutions to a Chinese company.

The two countries are trading partners and should therefore expand business relations in the interests of both sides, said a spokeswoman for the Foreign Ministry in Beijing on Thursday. China hopes that Germany will create a fair competitive environment for everyone, including China.

The Federal Cabinet had prohibited the planned sale to the Chinese CSIC Longjiang GH Gas Turbine Co (GHGT) with reference to the Foreign Trade and Payments Act. It feared that China could use the gas turbines not only for civilian purposes, but also to power warships. GHGT is part of the China State Shipbuilding Corp (CSSC), which also builds ships for the Chinese navy. Under the Foreign Trade and Payments Act, the German government can prohibit sales to non-EU countries if they could jeopardize national security. Following the veto, MAN Energy announced that it would discontinue the construction and development of gas turbines. However, profitable maintenance is to be retained. The MAN Energy division has a total of 100 employees in Oberhausen and Zurich.

(Report by Mei Mei Chu, written by Christina Amann, edited by Sabine Wollrab. If you have any questions, please contact our editorial team at Berlin.Newsroom@thomsonreuters.com (for politics and the economy) or Frankfurt.Newsroom@thomsonreuters.com (for companies and markets)