Germany’s new China strategy marks break with past as new emphasis placed on de-risking
- Blueprint backs EU’s strategy and highlights economic and political risks, but makes clear that decoupling remains off the table
- Report makes break with Angela Merkel era as Foreign Minister Annalena Baerbock says Berlin must take a new course because ‘China has changed’
The country’s new China strategy had been delayed for months after a process that was beset by infighting among the three-party coalition.
“China has changed. As a result of this and China’s political decisions, we need to change our approach to China,” read the document, seen as a flagship foreign policy issue for Foreign Minister Annalena Baerbock.
“The strategy confirms what the sparrows have been whistling from the rooftops for a long time: continuing chancellor Merkel’s China policy by other means is not an option for Germany in light of the changing reality,” said Reinhard Buetikofer, an influential German member of the European Parliament.
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While the paper makes broad policy recommendations, it is best viewed as a way to chart future relations.
“Anyone who listens to China knows that it will assertively shape the course of this century. With the China strategy we set up a compass to guide our relations,” Baerbock tweeted.
“It is not our intention to impede China’s economic progress and development. At the same time, de-risking is urgently needed. However, we are not pursuing a decoupling of our economies,” the document said.
Germany made clear that its China policy would align with broader EU goals, after years in which it has been accused of pursuing its own commercial interests at the expense of European unity.
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Amid heated debate about what European de-risking will look like, the German version promotes building up Europe’s own industrial base and seeking trade deals with alternative partners. Germany is also expected to seek ways to protect its own competitive advantages.
In future, government export credit guarantees for deals in China will be predicated on whether they help fuel domestic repression, the potential for technology transfer to Chinese partners and whether they deepen existing imbalances.
With this point in mind, Germany offered tentative support for the most controversial element of the EU’s plan – the screening of outbound investments into China.
“We have a common interest in preventing the narrow set of technological advances that are assessed to be core to enhancing the military and intelligence capabilities of actors who may use these capabilities to undermine international peace and security,” read the report.
Companies trading with China will be expected to carry out their own de-risking, and the report warned that the government will not bail out those that fail to address “concentration risks … in the event of a geopolitical crisis”.
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The strategy was cautiously welcomed by German businesses.
“Derisking but not decoupling – this strategy is correct. It addresses geopolitical risks, but at the same time emphasises Germany’s interest in substantial economic relations and cooperation with China to tackle global challenges,” said Siegfried Russwurm, President of the Federation of German Industries.
Berlin made clear that it was acting because of changes in Beijing’s economic practices, accusing it of reducing its own economic reliance on other countries while “making international production chains more dependent on China”.
In a harbinger of what the reaction from Beijing will be, China’s top foreign ministry official for Europe, Wang Lutong, tweeted that “Germany now faces many challenges and it’s important to address the root causes. But one thing is for sure: none of the problems are caused by China”.
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“China’s relationship with Russia, in particular since Russia’s war of aggression against Ukraine, is an immediate security concern for Germany,” the strategy read, adding that arms deliveries would “have an immediate impact on relations between the EU and China and on our bilateral ties”.
“Germany is working for de-escalation. The status quo in the Taiwan Strait may only be changed by peaceful means and mutual consent. Military escalation would also affect German and European interests,” it read.
It accused China of “eroding Hong Kong’s autonomy” and committing “grave violations of human rights” in Tibet and Xinjiang.
“We cannot close our eyes to the changes in China’s policies; they affect the quality of our relations,” it read.
Berlin plans to monitor the activities of Confucius Institutes closely after a string of accusations that they have been used to interfere in the country’s academic, social and political life.
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German organisations were warned to make sure their partnerships with the institutes uphold “the principle of the freedom of science, research and academic teaching”, while any government-funded activities must be “open to public inspection”.
Thorsten Benner, the founder of the Berlin-based Global Public Policy Institute, a think tank, described the revamp as a “much needed first-class funeral for Merkel’s delusions of ‘comprehensive strategic partnership’”.
“It offers a largely unvarnished take on realities of Xi’s party state and a pretty ambitious agenda for pursuing interests vis-à-vis China more effectively,” Benner said, referring to Chinese leader Xi Jinping.
German Chancellor Olaf Scholz, who has reportedly clashed with Baerbock over China policy, said on Twitter that the goal of the new strategy was “not to disconnect us”.
“However, we want to avoid critical dependencies in the future. With the China strategy, we are responding to a China that is changing and taking a more offensive stance.
“For us, the following applies: China is and will remain a partner, competitor and systemic rival.”
