Today, the German federal government is finally presenting its long-awaited and fiercely contested China strategy. The document is a novelty for Germany. Never before has so much attention been given to a geostrategic rival and economic partner. It shows how important Berlin considers the right approach to the People’s Republic for the coming years.
However, it is already clear that despite its rhetorical sharpness, the document can only be a compromise solution. The gap between security and economic interests is simply too large, as Finn Mayer-Kuckuk analyzes.
On Thursday, in a special edition, we will explain in detail how the paper differs from the leaked initial draft from last year and where Beijing will be particularly attentive.
Attention should also be paid to the Chinese electric vehicle manufacturer BYD. The former battery company aims to become the world’s leading electric vehicle producer. BYD plans to double its sales figures this year alone. Surprisingly, the former Mercedes brand Denza is expected to play a crucial role in this, as reported by Christian Domke Seidel.
In 2021, Stuttgart largely withdrew from the joint project with BYD. Now, BYD, which has mainly focused on mass-market electric vehicles, intends to produce more luxury premium models under the Denza brand. If successful, the Chinese company will soon become a direct competitor to Mercedes.
The German government is presenting its China strategy today, which has been in the works in the ministries for a year. Over half a year has passed since the drafts from the Ministry of Foreign Affairs and the Ministry for Economic Affairs became known. Since then, officials have worked hard behind the scenes. There have, as expected, been disputes between the ministries regarding the exact design of the strategy and its wording.
The government reportedly intends to publish the strategy without Chancellor Olaf Scholz explaining it in a press conference. The fourth-largest economy, the largest EU country, is developing its strategy towards the upcoming superpower while leaving it unclear to what extent the Chancellor supports it.
Only Foreign Minister Annalena Baerbock will publicly address the issue on Thursday. She will deliver a speech on German China policy at the China Research Institute of Merics at noon. Meanwhile, the leadership in Beijing will closely observe how Germany’s ministries define their relationship with China.
The greatest danger in drafting the strategy would have been complete ambiguity. The government has likely made an effort to provide at least a series of clear commitments. It has been known for some time that they want to clearly articulate German interests after decades of navigating based on sight.
According to the dictionary, a strategy is a “precise plan of action designed to achieve a goal”. However, a national strategy in Germany takes into account the interests of many groups. Large companies, small and medium-sized enterprises, 15 ministries, the Chancellor, civil society groups – all are allowed to voice their needs. The number of entities contributing to the wording is similarly high. Consequently, the paper will be diverse and ambiguous in certain places.
One of the biggest contradictions will be at the core of the paper: de-risking or risk minimization. Here, the differing needs of the economy and security policy are hardly reconcilable.
If only one of these camps had written the strategy, it would indeed read refreshingly clear and receive the undivided support of its respective target audience. However, it would hardly serve German interests. Both perspectives are valid. Therefore, a document had to be created that integrates security and economic interests.
On the one hand, departing from China is currently much more expensive than the hawks imagine. Take reshoring, for example: The shortage of skilled workers demonstrates that bringing production back to Europe would be impossible. Who would manufacture all the goods that currently come from China? A complete departure from China would adversely affect prosperity – despite the fact that China is more than ever willing to be a partner.
At the same time, the economy can no longer pretend that there are no delivery risks and human rights violations or that it does not concern them. The possibility of an attack on Taiwan must also be factored into the scenarios of companies.
To reconcile what does not fit together, the strategy once again invokes the worn-out triad of partner, strategic rival and competitor, which no European China paper can do without at the moment. However, the concept reveals the internal contradictions rather than resolving them.
Two of the three tones would still resonate together. However, China will not allow itself to be treated as all three simultaneously. Those expecting a partnership should not treat the country as a geopolitical rival and vice versa.
On the positive side, the final paper will have something for everyone since all key stakeholders have contributed to it. The economy can infer that China will continue to be an important trading partner, market, and production location. Human rights groups will recognize the outlines of a value-oriented foreign policy. Collaboration: Stefan Braun
BYD has big plans. In 2023, the Chinese conglomerate, which initially made a name for itself with batteries and now primarily focuses on New Energy Vehicles (NEV), aims to sell 3.6 million vehicles. This would make the Chinese company one of the top ten producers in the world. The Shenzhen-based corporation would need to double its sales figures to achieve this very ambitious goal, as they stood at 1.8 million units in 2022. However, an initial outlook makes this goal realistic. The Denza brand, recently under the control of Mercedes, also plays a central role in this endeavor.
The ten largest automakers in the world based on sales figures in 2022:
BYD knows about growth. The company took 13 years, from 2008 to 2021, to celebrate the sale of its one-millionth NEV. Since then, sales have been growing exponentially. This is partly due to a fundamental shift in the automotive market. Electric vehicles are gaining global significance, and China is not only the world’s largest automotive market but also an innovation driver in this industry. Moreover, BYD is less susceptible to supply chain issues. The company, rooted in battery production, integrated the entire value chain early on, from raw material extraction to battery production. The corporation even sells batteries to its competitors.
However, BYD faces a problem. The brand is primarily known for offering relatively affordable models. BYD dominates the market for vehicles priced between 100,000 and 200,000 yuan (approximately 15,500 to 31,000 dollars). This is where Denza comes into play. Mercedes founded the brand in 2011 as a joint project with BYD, with the goal of becoming “the most successful manufacturer of vehicles with alternative drives in China.” The first vehicle was launched in 2014. By 2021, the brand had only sold a total of 23,000 units. Mercedes held a 50 percent stake in the project and a majority share in BYD. In December 2021, Mercedes-Benz announced that it would reduce its stake to 10 percent, while BYD increased its stake in the joint venture Shenzhen Denza New Energy Automotive to 90 percent.
At the time, the German strategy consultancy Berylls analyzed that while the design was suitable, the price was too high. Since taking over, BYD has come to the exact opposite conclusion. The first vehicle under Chinese leadership was the Denza D9, launched in October 2022. It is a van with a bold appearance, available from 43,000 euros (50,000 dollars). Despite being among the most expensive cars in BYD’s portfolio, this new and striking design sold 55,500 units within the first eight months. The recently released electric SUV Denza N7, available since early July, follows the same pattern – eye-catching design and a higher price (starting from 39,000 euros/45,000 dollars).
Since the beginning of 2023, the luxury sub-brand Yangwang has completed the product portfolio at the top. The current offering includes the off-road U8, available for around 137,000 euros (160,000 dollars). Later this year, there will also be the U9 sports car at a similar price point. Zhao Changjiang, sales manager of BYD, announced that in order to achieve high sales volumes, it is necessary to have different brands that appeal to different people with products at various price levels, both in the Chinese and global markets. The goal is for BYD to have as broad a portfolio as Volkswagen.
With these high-priced models, BYD has become a direct competitor of Mercedes. The German company is increasingly focused on luxury models. The fact that Mercedes still holds 10 percent of Denza is likely a strategic consideration. Mercedes has declared an electric-only strategy and aims to sell only electric vehicles by the end of the decade. BYD is an important supplier of batteries. In parallel with the Denza setback in 2021, Hubertus Troska, a member of the board of Daimler AG and responsible for the Chinese market, announced an intention to further intensify the collaboration.
BYD’s growth strategy also includes increased exports. In January and February 2023, the brand exported 55,000 vehicles, more than double the number sold in the entire year of 2022 (25,000). Europe is particularly in focus – selected BYD models have been available in Germany since September 2022.
China has reaffirmed its plans for a manned moon landing within the next seven years. Zhang Hailian, chief engineer of the state’s space program, stated on Tuesday at a space forum in the central Chinese city of Wuhan that a manned moon landing is planned by 2030.
The specific plan involves sending two rockets to the moon: one to transport the spacecraft that will land on the lunar surface and another to carry the Chinese taikonauts. They will conduct scientific investigations and collect samples to bring back to Earth. Chinese scientists are currently working on the development of a new rocket generation called “Long March 10”, a lunar lander and other equipment.
China and the United States are currently engaged in a competition to send humans to the moon. While China aims to send taikonauts to the moon by 2030, the US plans to achieve another manned landing on the lunar surface through the “Artemis” project by the end of 2025. Both countries have the goal of exploiting potential lunar resources. Another aspect is the establishment of new habitats, both on the moon and Mars. rad
Miao Wu is convinced: “This youth is shaping a more colorful future!” She hopes for a more trusting relationship and better understanding between China and Germany among the younger generations.
In a way, Wu is at the forefront of this effort. She oversees so-called “China Academies”, where students from different places come together to learn about China: its language, history, geography, as well as intercultural understanding and answers to questions like “Why do the Chinese evaluate certain topics differently from us?”
The academies were established by the China Education Network and the state talent development center “Education & Talent”. Miao Wu works there as a project manager. Thus, the central institution for talent promotion in Germany now offers various China formats: introductory, student and exchange academies.
Highly motivated youth, enthusiastic instructors and a sophisticated pedagogical concept – many educational institutions can only dream of such conditions. However, Wu says this is the everyday reality at the China Academies. “When I was young, I would have greatly wished for such a support program because back then, personality and individual interests were hardly considered. The only thing that mattered was the high score on the Gao Kao (National College Entrance Examination in China).” The China Academies prioritize creating a protected environment where young people can freely develop their talents and personalities.
Miao Wu grew up in the central Asian province of Henan, studied business administration and learned German at the Beijing International Studies University. This allowed the native Chinese to pursue further studies in economics and East Asian studies at the Georg-August-University in Goettingen. Before joining the talent development center “Education & Talent”, she worked for several years at OIK gGmbH (Organization for International Contacts), where she organized international music festivals. Now, she advocates for greater China knowledge in Germany.
In this endeavor, she is supported by the China Education Network based in Berlin. Their goal is to expand China savviness in German schools and encourage exchange between young people from both countries. Miao Wu believes that “the promotion of China savviness in the German school landscape is underrepresented, and there is also a lack of regular exchange”. Given the growing importance of China in the world, she wonders why more schools don’t offer Chinese language instruction.
Her call to all young learners is: “Find a way to develop your own and reflected view of China.” The academies, where young people can delve into different modules and deeply engage with the vast and diverse country, are a good starting point. Juliane Scholübbers
Looking for a little refreshment? Temperatures of over 40 degrees Celsius are scorching large parts of China these days. A little bit of moisture is welcomed. Tourists are enjoying themselves with rafting, the trendy sport of this summer, at the Shunhuangshan National Forest in Hunan Province – if there is enough water available. Due to the heat and dryness, many streams do not have enough water.
Today, the German federal government is finally presenting its long-awaited and fiercely contested China strategy. The document is a novelty for Germany. Never before has so much attention been given to a geostrategic rival and economic partner. It shows how important Berlin considers the right approach to the People’s Republic for the coming years.
However, it is already clear that despite its rhetorical sharpness, the document can only be a compromise solution. The gap between security and economic interests is simply too large, as Finn Mayer-Kuckuk analyzes.
On Thursday, in a special edition, we will explain in detail how the paper differs from the leaked initial draft from last year and where Beijing will be particularly attentive.
Attention should also be paid to the Chinese electric vehicle manufacturer BYD. The former battery company aims to become the world’s leading electric vehicle producer. BYD plans to double its sales figures this year alone. Surprisingly, the former Mercedes brand Denza is expected to play a crucial role in this, as reported by Christian Domke Seidel.
In 2021, Stuttgart largely withdrew from the joint project with BYD. Now, BYD, which has mainly focused on mass-market electric vehicles, intends to produce more luxury premium models under the Denza brand. If successful, the Chinese company will soon become a direct competitor to Mercedes.
The German government is presenting its China strategy today, which has been in the works in the ministries for a year. Over half a year has passed since the drafts from the Ministry of Foreign Affairs and the Ministry for Economic Affairs became known. Since then, officials have worked hard behind the scenes. There have, as expected, been disputes between the ministries regarding the exact design of the strategy and its wording.
The government reportedly intends to publish the strategy without Chancellor Olaf Scholz explaining it in a press conference. The fourth-largest economy, the largest EU country, is developing its strategy towards the upcoming superpower while leaving it unclear to what extent the Chancellor supports it.
Only Foreign Minister Annalena Baerbock will publicly address the issue on Thursday. She will deliver a speech on German China policy at the China Research Institute of Merics at noon. Meanwhile, the leadership in Beijing will closely observe how Germany’s ministries define their relationship with China.
The greatest danger in drafting the strategy would have been complete ambiguity. The government has likely made an effort to provide at least a series of clear commitments. It has been known for some time that they want to clearly articulate German interests after decades of navigating based on sight.
According to the dictionary, a strategy is a “precise plan of action designed to achieve a goal”. However, a national strategy in Germany takes into account the interests of many groups. Large companies, small and medium-sized enterprises, 15 ministries, the Chancellor, civil society groups – all are allowed to voice their needs. The number of entities contributing to the wording is similarly high. Consequently, the paper will be diverse and ambiguous in certain places.
One of the biggest contradictions will be at the core of the paper: de-risking or risk minimization. Here, the differing needs of the economy and security policy are hardly reconcilable.
If only one of these camps had written the strategy, it would indeed read refreshingly clear and receive the undivided support of its respective target audience. However, it would hardly serve German interests. Both perspectives are valid. Therefore, a document had to be created that integrates security and economic interests.
On the one hand, departing from China is currently much more expensive than the hawks imagine. Take reshoring, for example: The shortage of skilled workers demonstrates that bringing production back to Europe would be impossible. Who would manufacture all the goods that currently come from China? A complete departure from China would adversely affect prosperity – despite the fact that China is more than ever willing to be a partner.
At the same time, the economy can no longer pretend that there are no delivery risks and human rights violations or that it does not concern them. The possibility of an attack on Taiwan must also be factored into the scenarios of companies.
To reconcile what does not fit together, the strategy once again invokes the worn-out triad of partner, strategic rival and competitor, which no European China paper can do without at the moment. However, the concept reveals the internal contradictions rather than resolving them.
Two of the three tones would still resonate together. However, China will not allow itself to be treated as all three simultaneously. Those expecting a partnership should not treat the country as a geopolitical rival and vice versa.
On the positive side, the final paper will have something for everyone since all key stakeholders have contributed to it. The economy can infer that China will continue to be an important trading partner, market, and production location. Human rights groups will recognize the outlines of a value-oriented foreign policy. Collaboration: Stefan Braun
BYD has big plans. In 2023, the Chinese conglomerate, which initially made a name for itself with batteries and now primarily focuses on New Energy Vehicles (NEV), aims to sell 3.6 million vehicles. This would make the Chinese company one of the top ten producers in the world. The Shenzhen-based corporation would need to double its sales figures to achieve this very ambitious goal, as they stood at 1.8 million units in 2022. However, an initial outlook makes this goal realistic. The Denza brand, recently under the control of Mercedes, also plays a central role in this endeavor.
The ten largest automakers in the world based on sales figures in 2022:
BYD knows about growth. The company took 13 years, from 2008 to 2021, to celebrate the sale of its one-millionth NEV. Since then, sales have been growing exponentially. This is partly due to a fundamental shift in the automotive market. Electric vehicles are gaining global significance, and China is not only the world’s largest automotive market but also an innovation driver in this industry. Moreover, BYD is less susceptible to supply chain issues. The company, rooted in battery production, integrated the entire value chain early on, from raw material extraction to battery production. The corporation even sells batteries to its competitors.
However, BYD faces a problem. The brand is primarily known for offering relatively affordable models. BYD dominates the market for vehicles priced between 100,000 and 200,000 yuan (approximately 15,500 to 31,000 dollars). This is where Denza comes into play. Mercedes founded the brand in 2011 as a joint project with BYD, with the goal of becoming “the most successful manufacturer of vehicles with alternative drives in China.” The first vehicle was launched in 2014. By 2021, the brand had only sold a total of 23,000 units. Mercedes held a 50 percent stake in the project and a majority share in BYD. In December 2021, Mercedes-Benz announced that it would reduce its stake to 10 percent, while BYD increased its stake in the joint venture Shenzhen Denza New Energy Automotive to 90 percent.
At the time, the German strategy consultancy Berylls analyzed that while the design was suitable, the price was too high. Since taking over, BYD has come to the exact opposite conclusion. The first vehicle under Chinese leadership was the Denza D9, launched in October 2022. It is a van with a bold appearance, available from 43,000 euros (50,000 dollars). Despite being among the most expensive cars in BYD’s portfolio, this new and striking design sold 55,500 units within the first eight months. The recently released electric SUV Denza N7, available since early July, follows the same pattern – eye-catching design and a higher price (starting from 39,000 euros/45,000 dollars).
Since the beginning of 2023, the luxury sub-brand Yangwang has completed the product portfolio at the top. The current offering includes the off-road U8, available for around 137,000 euros (160,000 dollars). Later this year, there will also be the U9 sports car at a similar price point. Zhao Changjiang, sales manager of BYD, announced that in order to achieve high sales volumes, it is necessary to have different brands that appeal to different people with products at various price levels, both in the Chinese and global markets. The goal is for BYD to have as broad a portfolio as Volkswagen.
With these high-priced models, BYD has become a direct competitor of Mercedes. The German company is increasingly focused on luxury models. The fact that Mercedes still holds 10 percent of Denza is likely a strategic consideration. Mercedes has declared an electric-only strategy and aims to sell only electric vehicles by the end of the decade. BYD is an important supplier of batteries. In parallel with the Denza setback in 2021, Hubertus Troska, a member of the board of Daimler AG and responsible for the Chinese market, announced an intention to further intensify the collaboration.
BYD’s growth strategy also includes increased exports. In January and February 2023, the brand exported 55,000 vehicles, more than double the number sold in the entire year of 2022 (25,000). Europe is particularly in focus – selected BYD models have been available in Germany since September 2022.
China has reaffirmed its plans for a manned moon landing within the next seven years. Zhang Hailian, chief engineer of the state’s space program, stated on Tuesday at a space forum in the central Chinese city of Wuhan that a manned moon landing is planned by 2030.
The specific plan involves sending two rockets to the moon: one to transport the spacecraft that will land on the lunar surface and another to carry the Chinese taikonauts. They will conduct scientific investigations and collect samples to bring back to Earth. Chinese scientists are currently working on the development of a new rocket generation called “Long March 10”, a lunar lander and other equipment.
China and the United States are currently engaged in a competition to send humans to the moon. While China aims to send taikonauts to the moon by 2030, the US plans to achieve another manned landing on the lunar surface through the “Artemis” project by the end of 2025. Both countries have the goal of exploiting potential lunar resources. Another aspect is the establishment of new habitats, both on the moon and Mars. rad
Miao Wu is convinced: “This youth is shaping a more colorful future!” She hopes for a more trusting relationship and better understanding between China and Germany among the younger generations.
In a way, Wu is at the forefront of this effort. She oversees so-called “China Academies”, where students from different places come together to learn about China: its language, history, geography, as well as intercultural understanding and answers to questions like “Why do the Chinese evaluate certain topics differently from us?”
The academies were established by the China Education Network and the state talent development center “Education & Talent”. Miao Wu works there as a project manager. Thus, the central institution for talent promotion in Germany now offers various China formats: introductory, student and exchange academies.
Highly motivated youth, enthusiastic instructors and a sophisticated pedagogical concept – many educational institutions can only dream of such conditions. However, Wu says this is the everyday reality at the China Academies. “When I was young, I would have greatly wished for such a support program because back then, personality and individual interests were hardly considered. The only thing that mattered was the high score on the Gao Kao (National College Entrance Examination in China).” The China Academies prioritize creating a protected environment where young people can freely develop their talents and personalities.
Miao Wu grew up in the central Asian province of Henan, studied business administration and learned German at the Beijing International Studies University. This allowed the native Chinese to pursue further studies in economics and East Asian studies at the Georg-August-University in Goettingen. Before joining the talent development center “Education & Talent”, she worked for several years at OIK gGmbH (Organization for International Contacts), where she organized international music festivals. Now, she advocates for greater China knowledge in Germany.
In this endeavor, she is supported by the China Education Network based in Berlin. Their goal is to expand China savviness in German schools and encourage exchange between young people from both countries. Miao Wu believes that “the promotion of China savviness in the German school landscape is underrepresented, and there is also a lack of regular exchange”. Given the growing importance of China in the world, she wonders why more schools don’t offer Chinese language instruction.
Her call to all young learners is: “Find a way to develop your own and reflected view of China.” The academies, where young people can delve into different modules and deeply engage with the vast and diverse country, are a good starting point. Juliane Scholübbers
Looking for a little refreshment? Temperatures of over 40 degrees Celsius are scorching large parts of China these days. A little bit of moisture is welcomed. Tourists are enjoying themselves with rafting, the trendy sport of this summer, at the Shunhuangshan National Forest in Hunan Province – if there is enough water available. Due to the heat and dryness, many streams do not have enough water.
