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Mar 24, 2023

Why Germany’s New China Strategy Needs to Go Beyond Symbolism

Germany’s China policy was long shaped by the country’s economic interests and the illusion that engagement could help bring about change. Beijing’s more assertive foreign policy has led to an awakening in Berlin. But how far will the German government go in redefining its relations with China?

German Chancellor Olaf Scholz, Finance Minister Christian Lindner and Foreign Minister Annalena Baerbock attend the weekly cabinet meeting at the Chancellery in Berlin, Germany March 1, 2023.
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There is no doubt about it: Germany’s China is undergoing a transition. Even former Chancellor Angela Merkel, shortly before leaving office, admitted that her government had been “a bit naïve” on China. While the outgoing chancellor indicated even she saw a need for change, the new government, consisting of the Social Democrats (SPD), the Greens, and the Free Democrats (FDP) signaled a radical shift in its coalition agreement before taking office in December 2021.

Cooperation, the three parties wrote, would be conditional on China’s compliance with international law and human rights. All sensitive issues ranging from the crackdown on civil liberties in Hong Kong to grave human rights violations against Muslim minorities in Xinjiang or a looming crisis over Taiwan were all covered by the text. In addition, the new government promised it would, for the first time in Germany’s history, develop a China Strategy that would take account of the changing role and behavior of China in the world.

However, from the day that the government took office until today, the question of how far Germany’s new China policy should diverge from the old policy remains contested. Several examples illustrate the remaining disagreements.

Change or Continuity?

It all started with a rumor before Chancellor Olaf Scholz had even been sworn into office. Press reports suggested that Scholz had asked Charles Michel, President of the European Council, to assure Chinese President Xi Jinping that he would make sure relations would stay the same. This equated to an affront to his new government partners, as it ignored the just concluded coalition agreement that reflected the demand of the Greens and FDP for a tougher approach to China.

Less than a year later, in November 2022, Scholz decided to pay Beijing a visit. It was not only outside observers but also members of his own cabinet who considered the chancellor’s decision unwise. Some took issue with the trip because Xi Jinping had just been confirmed in his third term as powerful general-secretary of the Chinese Communist Party, an office that his predecessors had left after two terms in office. Scholz’ trip to Beijing, critics argued, should not take a congratulatory and acclamatory tune. Not least, Scholz’ visit angered French President Emmanuel Macron, who had suggested a joint trip. Also, the fact that a large business delegation accompanied Scholz sent a signal of continuity at a time when the China Strategy, which was supposed to put policy on a new footing, had not yet been released. In an exceptionally open acknowledgment of disagreement, Foreign Minister Annalena Baerbock, a member of the Greens, publicly demanded from the chancellor that he stick to the coalition agreement in his exchanges with President Xi.

In addition to this, a few days before Scholz’ visit to China, the chancellor overruled six ministries and German intelligence services that had proposed prohibiting the Chinese state-owned shipping company COSCO from acquiring a minority stake one of Hamburg Port’s four container terminals. Again, on the day of the decision’s announcement, Baerbock issued a public statement disagreeing with Scholz’ decision. Her fellow senior Green, Vice-Chancellor and Economy Minister Robert Habeck and the FDP leader, Finance Minister Christian Lindner, both explicitly backed Baerbock’s statement.

Although such public disagreements on a core subject of foreign policymaking within a government is remarkable, these examples still overestimate the dissent within the government. All the parties involved agree that China’s foreign policy has become more assertive and in the present circumstance, with rising geopolitical tensions between the United States and China, Germany needs to reduce its strategic dependencies on the People’s Republic.

Russia’s war of aggression against Ukraine has further illustrated that the “unthinkable” has become possible, in other words, that geopolitics and nationalist chauvinism can trump economic rationalities. Germany’s overreliance on fossil fuels from Russia, the argument goes, should teach the country a lesson to avoid a similar mistake with China. Only the assessment of how quickly and how far economic engagement should be reduced remains contested.

A More Principled Approach

This may explain how the main features of the China Strategy are taking shape despite the fact that the country is still awaiting the public release of the document. The German Foreign Office is coordinating this whole-of-government approach. But the government has decided to first unveil a National Security Strategy and follow-up with the China Strategy roughly four to six weeks later. It is unlikely, therefore, to be published before May.

In November 2022, a first draft that the Foreign Office had circulated to all ministries was leaked to the press. While this document did not necessarily reflect the position of the entire government, let alone the chancellor, and the ministries are continuing to work on the strategy, it still provides a glimpse of what is to come – though the final version is likely to strike a slightly less critical tone of China.

The basic narrative of Germany’s China Strategy is likely to be that, as China’s policy has changed and become more assertive so the German approach to the country must change as well. In particular, adherence to international law and universal values is considered essential, but the China Strategy will also reflect on Germany’s interests. This indicates a more principled approach toward China and is an important manifestation of the ongoing shift in Germany’s China policy. At the same time, however, the strategy might not spell out a comprehensive description of the ideal relations with the People’s Republic.

Echoing the EU?

Moreover, the government has promised to Europeanize Germany’s China policy. This is a tricky pledge. The European Union consists of 27 member states that pursue very different China policies. This raises the question of whether Germany can go anywhere beyond repeating the EU’s lowest common denominator, that is the description of China as being simultaneously a partner, competitor, and systemic rival. What remains contested in the EU is, however, the relationship between these three roles.

It will be interesting to see whether the German China Strategy will advocate an interpretation. For example, it could either echo the EU’s Strategic Outlook of 2019 and argue that the role depends on the policy field. Alternatively, and probably more adequately, German could push for the argument that China always plays all three roles and then propose in concrete fields how this should shape our policy.

The most important question is, however, a different one: Will the strategy indicate the priorities of the German government in its relations with China? The leaked draft from November 2022 is a document of 60 pages that contains a comprehensive list of policy goals and their reasoning. There is little doubt that the document reads well. But one doesn’t have to be an expert to understand that achieving all of it will be unrealistic. Not least, trade-offs exist within the document.

For example, combating climate change is identified as a crucial goal, but so are the reduction of strategic dependencies and upholding technological competitiveness. Currently, Germany’s energy transition largely rests on the import of Chinese technologies for renewable energies—from solar panels to wind turbines. Which should take priority: the energy transition or a reduction of strategic dependencies? Similarly, if China is interested in technology transfer from Germany for the sake of reaching carbon neutrality, is supporting the fight against climate change more important or the preservation of a technology edge over China where it still exists?

If the China Strategy does not identify priorities to deal with these and similar trade-offs Germany would be missing an opportunity: European countries are closely watching the strategizing because they look for a greater German role in shaping the future of European relations with China that will undergo significant change regardless of what happens in Berlin. If Germany doesn’t make hard choices now, change will happen to it anyway, but the Germans won’t be the ones shaping it.

Tim Rühlig is Senior Research Fellow at the Center of Geopolitics, Geoeconomics, and Technology at the German Council on Foreign Relations (DGAP).

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