German authorities could place a curb on the export of chemicals used in semiconductor manufacturing to China, reported Bloomberg.

People familiar with the development said the export restrictions are part of the German government’s efforts to limit Beijing’s access to goods and services required to manufacture advanced semiconductors.

If put into effect, such a move would prohibit German businesses like Merck KGaA and BASF SE from selling some of their semiconductor chemicals to China, they added.

German Chancellor Olaf Scholz is believed to have adopted a tough stance towards Beijing as he attempts to find a balance between defending Berlin’s economic interests in China and worries about national security and human rights.

However, ties between Europe and China have started developing cracks, especially since Russian President Vladimir Putin and Chinese President Xi Jinping made a “no limits” friendship declaration just weeks before Moscow launched a military offensive against Ukraine.

Representatives of the German government and the two companies declined to comment on the development.

Scholz and Economy Minister Robert Habeck are working with their peers in Europe and the US on this issue.

The news comes amid the US push for a global blockade of China’s access to critical technologies, such as semiconductors.

According to officials in Berlin, there is no pressure coming from Washington on the issue and there is a strong desire to co-operate and stand together against China.

Staff members in Habeck’s office have also been asked to develop strategies to reduce Germany’s reliance on China and increase its resilience in specific areas.

The idea of Germany curbing chemical exports is part of these efforts, the sources said.

Last month, The Netherlands joined the US in placing export restrictions on semiconductor technology to China.

Meanwhile, one of the ways China is countering these efforts is by potentially banning the export of technology used to make rare earth magnets.