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Dear reader,

Since the Russian invasion of Ukraine at the latest – and its consequences like the impending gas shortage – Germany has also become increasingly aware of its dependencies on China. Foreign Minister Baerbock and Economics Minister Habeck want to chart a new course. And German companies are also beginning to rethink their position. The problem is that breaking away from Russia is already difficult, but in the case of China, it will be a real Herculean task. Germany’s dependencies on China are much larger and complex.

Nico Beckert analyzes where German dependencies are most significant – and why the much-cited “decoupling” will not be an easy solution. Since China also wants to become less dependent on Germany, he draws the conclusion: A turning point is approaching.

Meanwhile, Taiwan is on alert – literally. David Demes shows what this means for the people in Taiwan and how the country is preparing for an emergency: On Monday, sirens were howling and people were forced into bunkers – across the nation, protective measures were being practiced for a Chinese missile attack.

Taiwan’s military is also holding the Han Kuang maneuver. More than 20 ships and aircraft train for an emergency: An attack by the People’s Republic of China. In any case, the words of Taipei’s mayor are thought-provoking. “It is necessary to make preparations for the event of a war,” Ko Wen-je said on Monday.

Your
Michael Radunski

Feature

Dependencies lead to turning point for China business

Like many industries, the automotive industry is dependent on China. Risks are increasing. At the same time, China’s appeal is declining.

Strong economic dependencies are dangerous. This is currently demonstrated by the shortage of Russian gas. But Germany’s economic dependencies on China are much larger. Many companies, as well as the German government, are now rethinking their China strategy. It could be the beginning of a turning point.

By
Nico Beckert

For years, China was considered one of the preferred partners of German politics and business. The People’s Republic was a guarantor of German growth and has long since risen to become Germany’s largest trading partner. Automobile and mechanical engineering companies make huge profits in the People’s Republic.

However, there are many indications that Germany’s economic involvement in China is facing a turning point. The Covid lockdowns and the Chinese focus on their own competitiveness are making the country increasingly unattractive.

Large dependencies on Russia demonstrate risks

Added to this is the new fear of becoming too dependent: Germany’s gas dependence on Russia is likely to lead to a recession this winter. Against this backdrop, Germany’s dependence on China is also being reassessed. Foreign Minister Annalena Baerbock recently said she was “very serious” about reducing dependencies on China.

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