Germany’s recent shift in its approach towards China reflects a notable change from its previously accommodating and sympathetic stance to a more cautious and confrontational one. While some may argue that Germany is following the United States’ lead, the comprehensive nature of Berlin’s approach indicates that they are taking the lead in this matter, akin to Japan’s stance during the G7 meetings in Hiroshima.
According to translations of the 64-page strategy document released by Chancellor Olaf Scholz’s coalition government, Germany’s motivation to change its approach stems from China’s own actions. The document accuses Beijing of attempting to dismantle the long-standing “rules-based international order” that has governed global trade and finance for decades. Furthermore, it highlights China’s pursuit of self-sufficiency while deliberately making other economies reliant on it.
Although Germany still considers China a trade partner, the document acknowledges the increasing prominence of China’s “systemic rivalry.” It specifically accuses Beijing of exploiting technical dependence to achieve political objectives and merging civilian and military policies. Additionally, the strategy document identifies China’s quest for hegemony in the Indo-Pacific region as a threat to Europe and global security.
Over a period of time, Washington’s attitude towards Beijing has grown progressively suspicious and occasionally antagonistic. Strictly in terms of timing, it may appear that Berlin is merely emulating Washington’s approach. However, considering Germany’s history of criticizing Washington and Chancellor Scholz’s recent trade mission to China, it is more probable that Germany’s shift in policy reflects an independent decision.
It is essential to note that Germany’s intelligence agency recently designated China as the “primary threat concerning economic and scientific espionage, as well as foreign direct investment in Germany.” This designation further highlights the seriousness of Germany’s concerns regarding China’s actions in the economic and technological domains.
Recently, Germany received an indirect warning about China’s ambitions for trade dominance, as German exports to China increased only by 3.1 percent in 2022, while imports surged by 33.6 percent, resulting in a significant negative trade gap of nearly 100 billion euros.
In response to these concerns, the new German strategy aims to reduce reliance on critical sectors, particularly in medical technology, medicinal products, and rare earths. It also seeks to amend trade laws to consider “security interests” in all trade arrangements and investments with China, and implement export controls with a focus on cyber security and surveillance. Additionally, the strategy aims to expand economic relations with Asia and other regions.
Of particular irritation to Beijing is Germany’s firm stance on Taiwan. The strategy commits Berlin to enhance relations with Taiwan, support its participation in international organizations, and advocate for any potential reunification with mainland China to occur peacefully and with mutual consent. Furthermore, Germany aligns with the United States in pressuring China to relinquish its “developing nation” status at the World Trade Organization.
Although the Germans do not explicitly mention “de-coupling” from China, a concept often discussed in Washington, they prefer the term “de-risking.” This means maintaining trade ties with China while safeguarding against dependency, unfair trade practices, and Chinese coercion. The strategy encourages German businesses to diversify their supply chains away from China, but Berlin does not intend to mandate such diversification, as many German firms are already undertaking this process voluntarily.
Unsurprisingly, Beijing is displeased with Germany’s shift in approach. While the United States and Japan have been challenging China’s unfair trade practices, Germany had appeared eager to gain advantages in its dealings with China. However, recent developments, such as the G7’s agreement to limit reliance on China and Berlin’s new strategy, have altered this dynamic. So far, there has been limited reaction from Beijing, but the situation is still unfolding, and further responses may arise in the future.
As Germany implements its new strategy, tensions between Berlin and Beijing have escalated. China views Germany’s approach as a betrayal of their previously friendly relations, and there are concerns about potential economic repercussions. Chinese officials have issued veiled warnings, hinting at possible retaliatory measures if Germany continues on this path. Some fear that China could target German businesses operating in the Chinese market or restrict access to critical supplies, further exacerbating the negative trade gap.
In response to China’s growing assertiveness, Germany is seeking to strengthen ties with like-minded nations in the Indo-Pacific region, such as Japan, Australia, and India. The goal is to form a united front against China’s aggressive economic practices and territorial ambitions. European partners, especially those within the European Union, are closely observing Germany’s approach and considering their own positions regarding China
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