Germany is Drafting New, Tougher China Strategy

Germany is Drafting New, Tougher China Strategy

German Chancellor Scholz prepares for his Nov. 4 trip to Beijing, being closely watched regarding how serious Germany is to reduce its economic reliance on China and to confront its increasingly autocratic leadership. Scholz will become the first G7 leader to visit China since the start of the COVID-19 pandemic and the first to visit President Xi since he secured a precedent breaking third term at the Communist Party Congress last month. Deep trade ties bind Asia and Europe’s biggest economies, with rapid Chinese expansion and demand for Germany’s cars and machinery fueling its own growth over the past two decades. China became Germany’s single biggest trade partner in 2016. In addition, nearly half of Germany’s industry now rely on Chinese inputs.

Despite significant trade relations, Scholz’s trip comes at a time of increasing tensions between Beijing and the West, particularly Germany’s top security ally U.S., about China’s trade practices, human rights abuses and territorial ambitions.

The trip also comes amid concerns at home that Germany could become reliant on another authoritarian state after the fallout of its over-reliance on Russian energy.

“It is extremely important that we never again make ourselves so dependent on a country that does not share our values,” Foreign Minister Baerbock said.

Scholz, in his meetings with Premier Li and President Xi, is expected to press China to open up its markets, raise human rights concerns and discuss autocratic tendencies.

Germany had already started to take a slightly more hawkish stance on China during former Chancellor Merkel’s final days, for example by sending a warship to the disputed South China Sea for the first time in two decades last year.

Now Scholz’s government is drafting its first ever China strategy, on the basis of a coalition deal that struck a tougher stance on Beijing, mentioning sensitive issues such as Taiwan and Hong Kong and human rights violations in Xinjiang.

Scholz made his first trip in Asia to Japan, not China, unlike his predecessor, as a sign of changing times.

Yet some coalition members and European officials worry there are early signs Scholz, who has warned against decoupling, will not mark a decisive break with what they view as Merkel’s “mercantilist approach” towards China.

Scholz will be accompanied by a delegation of business leaders including the chief executives of Volkswagen, BASF, Siemens, Deutsche Bank, BMW, Merck and BioNTech.

Last week the German chancellor also pushed through a cabinet decision to allow China’s Cosco to invest in a terminal at Hamburg port despite pushback from his coalition partners.

Scholz’s junior coalition partners, the Greens and Free Democrats, have long been more hawkish on China than his Social Democrats.

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