Today you are receiving China.Table earlier than usual in the form of a special edition on the German government’s China strategy. It was approved by the German Cabinet this morning and officially published at noon. We are already providing you with a comprehensive set of analyses on the paper.
Geopolitics: Michael Radunski explains what the repositioning means for Germany’s place in the triangle between the USA-EU-China.
Economy: The main topic here is de-risking. The German public should shoulder the risks in the stead of large companies – they are increasingly expected to bear the risks themselves and assess them realistically.
Civil society: The strategy finds clear words on human rights, says Marcel Grzanna. The paper clarifies that even those who respect China can criticize the Uyghurs’ situation.
Climate action: Environmental cooperation is an important aspect of the strategy. However, Nico Beckert sees conflicting goals between increased cooperation and greater independence from Chinese supplies.
Universities: Researchers in Germany are particularly uncertain about how to deal with China. Tim Gabel describes what guidance the strategy paper offers them.
Europe: Brussels urgently expects Berlin to deliver signals on China policy – just as Berlin wants to align its policy with Brussels. Germany’s China-critical reorientation is well received in the EU, says Till Hoppe.
Germany’s Foreign Minister Annalena Baerbock was even more frank at today’s event organized by the China Research Institute Merics than the paper the ministers adopted a few minutes earlier. Although the Foreign Ministry was in charge of its drafting, it is the joint strategy of all ministries and the Chancellery. That is why the wording sounds particularly cautious in areas where many interests are touched.
The Green minister did not hide her reservations in two directions. She clearly emphasized the aspect of China as a rival against which Germany had to brace itself. And she lashed out at the industry, which she accused of wanting to be bailed out by the taxpayer if a China crisis were to hit.
These thoughts are also reflected in the strategy, albeit more cautiously expressed. What does Beijing think of it? We do not know. The German government has not yet finished the translation into Mandarin.
It has turned out to be more concise and unequivocal than feared after the lengthy disputes within the German government: On the last day before the summer break, the German government published Germany’s first China strategy. The wait was worth it: The strategy reveals the outlines of an entirely new approach to the second-largest economy.
“China has changed – this and China’s political decisions make it necessary to change the way we deal with China,” the 64-page strategy says right at the beginning. This is a very central message to all in Germany who believe that good economic relations with the authoritarian People’s Republic can be maintained forever, while ignoring the massive increase in domestic human rights violations and the increasingly aggressive foreign policy and geopolitical changes.
“We show ways and instruments how Germany can cooperate with China in the heart of Europe without endangering our free democratic basic order, our prosperity and our partnership with other countries in this world,” said Federal Foreign Minister Annalena Baerbock (Greens) in a speech to China think tank Merics in Berlin.
Three aspects of the China strategy were particularly important to the Foreign Minister:
Above all, four groups can be identified as addressees of the strategy:
Both Chancellor Olaf Scholz and Baerbock emphasized the desire to cooperate with Germany’s largest trading partner. “We always address critical issues such as human rights, the rule of law and fair competition,” the Chancellor posted on Twitter. “We need China, but China also needs us in Europe,” Baerbock said at the Merics event. “We are realistic, but not naive.”
There had been a dispute in particular between the Chancellery and the Green-led foreign and economy ministries. Baerbock and the economy ministry led by Robert Habeck had called for a tougher line against China and companies that rely massively on business with China, namely Volkswagen, BASF, Mercedes-Benz and Siemens.
“The China strategy gives our relations a new framework,” Scholz now also wrote on Twitter. Germany wants to “avoid critical dependencies in the future.” This means that a minority stake like the one by Chinese state shipping company Cosco in an operator at the container terminal in the Port of Hamburg, which Scholz had pushed through against the opposition of the Greens just a few weeks back, will likely no longer be possible under the newly formulated China strategy.
There was no immediate reaction from Beijing to the publication of the China strategy. But the communist leadership already voiced clear criticism after Germany unveiled its security strategy a month ago. “To view and build international relations by viewing others as competitors, rivals or even adversaries and turn normal cooperation into security or political issues will only push our world towards a vortex of division and confrontation,” Foreign Office spokesperson Wang Wenbin said.
The new strategy by the German government provides guidance to businesses on how to deal with China-related risks in the future. As it also forms the basis for future regulations and other priorities in promotion, companies, and business associations will scrutinize it closely. The overarching theme is, as expected, risk minimization (de-risking). Another key topic is strengthening technical capabilities and competitiveness to better counter China.
However, the strategy also emphasizes that China is currently an important and even indispensable economic partner (section 3.4). It explicitly states, “We want to maintain economic interconnection with China.” The government continues to give companies the freedom to determine their best course of action abroad based on their own assessment.
Yet, the paper also provides a path towards a future with reduced geopolitical dependencies. The message is that companies should consider this process in their future decision-making. The government aims to “raise awareness” among companies about the risks.
One major concern of the Green Party-led ministries is the socialization of entrepreneurial risks. This issue arises repeatedly during financial crises when the state rescues important credit institutions that have previously generated high profits by taking corresponding risks. It is not just banks that are “too big to fail”. This category also includes companies such as VW and BASF, both deeply intertwined with China.
The Ministry for Economic Affairs, led by Robert Habeck, began reconsidering and scaling back state guarantees for business with China over a year ago. His party colleague Annalena Baerbock explicitly supports this approach.
The guarantees that are now set to expire have previously secured investments. For example, if a company invests billions to build a factory in an uncertain country, and the project fails due to government intervention, the German state steps in with compensation. The introduction of these guarantees was meant to encourage companies to invest globally.
However, according to the current government, these guarantees create the wrong incentives, particularly regarding China risks. As China risks are expected to decrease, it is counterproductive to provide even greater state-backed investment support. All of this can be found in section 4.6 of the China strategy. In practice, the assumption of guarantees and other support for business with China has already dramatically decreased in recent months.
Overall, the strategy sends a message to large German companies: When it comes to China, risks will be the companies’ problem, not the taxpayers’. Currently, both the Ministry of Foreign Affairs and the Ministry for Economic Affairs are undergoing a realignment. Instead of being the best partner for businesses and nurturing them, their activities are under close observation.
This also applies to the topic of investment control. While the strategy does not provide a directive for comprehensive monitoring of international investments, section 4.6 states, “We acknowledge that appropriate measures aimed at countering risks associated with foreign investments may be important in this context.” It then refers to planned EU regulations.
There is a separate section devoted to protecting critical infrastructure. These are facilities whose failure would have dramatic consequences for the community. This traditionally includes power, transportation, data and mobile networks, water supply, financial sector and even food supply.
The strategy announces a “critical infrastructure framework law” in section 4.8. The goal is the “immediate reduction of risks”. The paper does not provide details on what it will include, instead referring to future laws and ongoing agency reviews. However, the spirit of this section contradicts further involvement of Chinese IT suppliers such as Huawei and ZTE in the expansion of German data and mobile networks. It also opposes Chinese acquisitions of media companies.
The strategy paper also identifies two specific product groups in which Germany should not depend on China (section 4.2):
However, diversification should occur “at reasonable costs”.
From a geopolitical perspective, Germany’s China strategy shines with clarity at the outset. “China is attempting to reshape the existing rule-based international order in various ways,” the introduction says. And paragraph 1.4 lists how Germany intends to meet this rivalry: Collectively in the European Union and NATO with the United States. The idea of a detached, European autonomy is thus indirectly rejected from the very beginning.
Overall, it shows that the government has recognized China’s offensive geopolitical stance: Be it overtly military through a massive arms build-up or covertly diplomatic through initiatives such as the Global Security Initiative. Paragraph 5 frankly states: China is attempting “on all continents and in international organizations (…) to change the existing rule-based international order according to Chinese ideas.”
All continents and levels are listed in short paragraphs. Africa is chosen as a central goal of the EU, Latin America and the Caribbean are even praised as natural partners for Germany and Europe. Even the Arctic and Antarctica, outer and cyberspace, as well as submarine fiber optic cables and satellite navigation are mentioned. It is good that this captures the scale of the challenge posed by China. Including how China attempts to undermine the UN from within (paragraph 5.6). However, some of the wording sometimes seems detached from reality.
The German government avoids clear words in many passages. For instance, on the potential danger of US-China rivalry, it says: “China’s antagonistic relationship with the US is at odds” with Germany’s security. And China’s stance on the Ukraine war is assessed as follows: “China does not credibly defend Ukraine’s sovereignty and territorial integrity”.
Especially on this issue, more clarity would have been possible. Particularly because Foreign Minister Annalena Baerbock has done this herself in Beijing. It is striking that the geopolitical consequences of the Ukraine war are hardly acknowledged – namely the growing bloc formation of China and Russia against the West.
By contrast, the German government is more explicit on the Taiwan question. The island is mentioned a total of 13 times in the German China strategy. Right at the beginning, the government makes clear: “The One-China policy remains the foundation of our actions. Diplomatic relations exist solely with the People’s Republic of China.”
However, paragraph 5.7 states: “Any change in the status quo in the Taiwan Strait must happen peacefully and by mutual agreement”. It also supports “the relevant participation of democratic Taiwan in international organizations.”
Here, as in many other places, the task now is to turn the strategic guidelines into reality. And a number of questions arise: If, for instance, more German military presence in the Indo-Pacific is announced on paper, will German warships cross the Taiwan Strait in the future?
Overall, the geopolitical part of Germany’s China strategy breathes a bit of the spirit of the “German Zeitenwende”. It seems as if Germany is daring to become a factor in foreign policy. This would go some way toward fulfilling its responsibility as a leading European industrial nation. However, in several parts of the China strategy, it still seems as if the German government is sometimes scared of its own courage.
The 1948 Universal Declaration of Human Rights by the United Nations is a thorn in the side of the People’s Republic of China. The charter’s claim to universal validity provides a huge weak spot where an increasingly totalitarian regime like China’s can be repeatedly targeted. China’s insidious intention to present itself to the world as a friendly dictatorship contradicts the UN declaration.
The German government’s China strategy raises the hand to Beijing’s permanent watering-down tactics. “With concern, the German government views China’s efforts to influence the international order along the lines of the interests of its one-party system and, in the process, to relativize the foundations of the rule-based order, such as the status of human rights,” reads the introduction to the paper.
The strategy broadly addresses human rights issues and makes them a core factor in its own political orientation toward the country. “We cannot close our eyes to changes in China’s policies; they affect the quality of our relations.”
It criticizes the repressive policies against Uyghurs, Tibetans and other ethnic minorities, the political purge against opposition figures in Hong Kong, the treatment of freedom of expression and civil rights activists, but also women and marginalized groups. This is “a gauge of the state of a society.”
The paper does not concede a special role to China. “We respect each country’s own history and culture. At the same time, universal human rights cannot be relativized, but are inalienable and valid worldwide,” it says.
The German government views the situation of the Uyghurs in a European context. “No competitive advantages may arise from the violation of human rights. China has ratified the two fundamental standards of the International Labor Organization prohibiting forced labor; the German government attaches particular importance to their comprehensive practical implementation and is committed to ensuring that products derived from forced labor may not be traded in the European single market.”
The World Uyghur Congress (WUC) welcomed the support of an EU regulation banning forced labor products. “We, therefore, now expect politicians and companies to take effective action,” said Berlin Director Haiyuer Kuerban.
There was also approval from the opposition. China is an economic rival for the EU, not least because Beijing gains advantages by circumventing environmental and human rights standards, said René Repasi (SPD), Chair of the European Parliament’s China Delegation. A ban on products from forced labor and the European Supply Chain Act are, therefore, instruments that also ensure the assertion of European economic interests vis-à-vis China, he said.
Renata Alt (FDP), Chairwoman of the Human Rights Committee in the German Bundestag, called for a quick implementation of the paper: “It is important that the strategy emphasizes human rights and also denounces human rights violations in Xinjiang and Tibet, but words must now be urgently followed by deeds.”
The Executive Director of the International Campaign for Tibet (ICT), Kai Muller, generally welcomed the mention of the precarious situation of Uyghurs, Tibetans and Hong Kongers, but would have preferred even clearer wording to describe the extent of ‘crimes against humanity.’ “The picture is mixed, and it will depend on how the strategy is implemented specifically and whether economic and trade policies will dominate our discourse,” Mueller said.
When it comes to green technologies such as solar panels and lithium batteries and raw materials for the energy transition, there are “critical dependencies” on China that the People’s Republic has already “instrumentalized” when dealing with other countries, Germany’s China strategy warns. Consequently, it aims to diversify supply chains and strengthen “Europe’s innovative strength and production capacities, including in environmental technologies.” To this end, the “use of state resources,” i.e., subsidizing investments, is to be simplified.
The final version no longer mentions support for an “import ban from regions with particularly severe human rights violations,” as was still the case in an older leak. This could once again fuel the debate over the solar supply chain and allegations of forced labor in the Uyghur province of Xinjiang.
However, the German government cannot be too aggressive when it comes to diversification. Because if China feels threatened, it could retaliate. In January, plans to restrict exports of solar production equipment became public – and according to industry experts, the Chinese government is still discussing how to implement them in practice. And just a few days ago, China restricted gallium and germanium exports. Green industries are only affected minimally, as the two raw materials are only required for a few special solar applications. But the decision is seen as China’s warning signal: “De-risking” could pose new risks to these supply chains.
It already became apparent at the June Sino-German government consultations in Berlin that the German government wants to push China harder regarding international climate policy. “China has a special responsibility for preserving the world’s climate,” the strategy states. “The next time Scholz talks with Xi Jinping, the topic of climate will be on his agenda,” says Lutz Weischer of the environment and development NGO Germanwatch, emphasizing the high importance of the topic in the strategy.
The background: China is currently the largest emitter of CO2 by far. The Chinese climate target of reaching peak emissions by 2030 is incompatible with the Paris climate goals. If all countries were to implement similar unambitious policies, global warming would reach up to three degrees, according to the Climate Action Tracker.
For this reason, the German government wants to “encourage China to set more ambitious targets for reducing greenhouse gas emissions” in the future. Here, the government voices the clear expectation that China, as the “second-largest economy, will contribute to climate action in line with its capabilities and responsibilities.”
Climate action will become a “focus of bilateral cooperation.” In this context, the government also wants to address the coal phase-out in China. Clear demands or cooperation offers are not included in the strategy and were not decided at the Sino-German government consultations. This is because the issue is sensitive: Coal is vital to China’s energy security. Moreover, the country has a strong coal lobby. The German government also wants to use the climate and transformation dialogue with China to “make industrial processes more climate-friendly, accelerate the energy transition, and facilitate the switch to climate-friendly mobility.”
The strategy warns that China must not use cooperation on climate protection “as a leverage” to advance interests in other areas but does not go into detail.
Furthermore, the German government wants China to participate in the so-called global loss and damage fund, i.e., to provide financial resources for preventing and adapting to the climate crisis in poorer countries. Regarding climate finance, China regularly retreats to the position that, according to the official interpretation, it is a developing country and does not need to participate. China is welcome to join Scholz’s climate club if it has the “appropriate level of climate policy ambition,” the strategy states.
However, Weischer also criticizes some blanks in the strategy, such as “the reduction of methane emissions, which are important for meeting the 1.5-degree target. It also hardly mentions concrete measures and opportunities for cooperation on how China’s emissions could be reduced in the short term.”
How the strategy is implemented will now be decisive, Weischer said. “I see many tasks for the German Foreign Office and the Ministry for Economic Affairs and Climate Action, for example, on the dialogue on the coal phase-out or China’s role in climate financing.” The Germanwatch expert calls for new resources to be provided to these ministries in order to breathe life into the strategy.
In research, the German government’s China strategy aims to unite two poles: On the one hand, it wants to further develop cooperation in important fields such as AI, quantum or climate action. On the other hand, however, the risks of dual-use and one-sided knowledge transfer are to be minimized (keyword: de-risking).
What is noticeable right from the start: The tone of the China strategy is much more restrained – in contrast to the remarks made by Federal Research Minister Bettina Stark-Watzinger (FDP) after the Sino-German intergovernmental consultations. However, there is unfortunately no detail about possible implementations or concrete activities.
Whereas the research minister announced “only limited scope for new collaborations” during the government consultations with the Chinese side and urged universities in interviews to “critically scrutinize” their ties to the Confucius Institutes, the China strategy envisions “further developing science relations in a value- and interest-driven manner” and “strengthening the dialogue with universities and research institutions.”
There are no plans to closer document collaborations with China or even a central register for research collaborations, as some China experts proposed earlier this year. Instead, the German government promises to advise the scientific community on “taking precautions against risks in dealings with China and preventing the emergence of one-sided dependencies in these collaborations”.
The government claims to have recognized the risk of military use of research results: “We take into account that civilian research projects, including basic research, are also being strategically considered by China with regard to their military applicability. US security expert Jeffrey Stoff, founder and president of the Center for Research Security & Integrity (CRSI), revealed in a report how naively German research institutions and companies cooperated with Chinese institutions.
Stoff told Table.Media that governments should “provide guidelines and list things they want to warn about or restrict.” The strategy does not contain any concrete plans or offers in this regard. Presumably in order to maintain a diplomatic tone – which the Chancellery has urged in particular – the paper remains rather cryptic on these issues. It promises to strive for a “better mutual understanding of the respective funding structures and processes”.
Moreover, the German government does not want to solve many problems at the national level, but instead refers to the EU – and here above all to Horizon Europe. For example, restrictions on transnational data traffic and imbalances in access to major Chinese research institutions are listed. China had withdrawn from negotiations on uniform international regulations following the “EU-China Science, Technology, Innovation Roadmap”.
In its strategy, the German government announced talks with the Chinese government to “improve the working conditions of German science organizations in China.” Here, the updated version of the Chinese anti-espionage law recently caused unrest among science organizations and among individual researchers. The law allows China authorities to take action against foreign institutions that endanger national security and national interests.
As Table.Media has learned from Chinese government circles, this concern is met with little understanding in China. The country claims that it is still safe for German researchers to work there.
At the same time, efforts are being made to revive the exchange of researchers after the Covid pandemic. The German government China strategy is also committed to promoting Germany internationally as a place for study, teaching and research. The aim, however, is to “retain Chinese talent in Germany and Europe in the long term.”
During Chancellor Angela Merkel’s time, the German government was seen in Brussels as too friendly towards Beijing. With its China strategy paper published on Thursday, Berlin is at least on paper shifting towards the hawkish camp: De-risking is “urgently needed”, writes the German government, aligning itself with EU Commission President Ursula von der Leyen.
This is viewed favorably in Brussels. The German strategy is in line with their own approach, according to the European Commission. Reinhard Buetikofer, Chairman of the China Delegation in the European Parliament, praises the paper for providing “a realistic positioning of German policy towards Beijing” and addressing the necessary European integration.
However, the Green Party member of parliament notes that the China strategy is not the end of the necessary process of reorientation but rather the beginning: “The de-risking to which it commits itself must be filled with concrete policies.” This will not happen without contradictions and further struggles. There is resistance to distancing from Beijing, especially within the German industry.
The European Commission recently proposed specific measures in its strategy for economic security. The German government partially adopts these proposals:
In addition, the German government intends to support EU-wide monitoring of critical dependencies on raw materials and intermediate products, as envisaged under the Critical Raw Materials Act. It also commits to supporting EU legislative initiatives targeting China, such as the directive on due diligence obligations for companies to ban products made from forced labor. “The German government’s position that human rights violations should not lead to competitive advantages is particularly welcome,” says René Repasi (SPD), Vice-Chair of the China Delegation in the European Parliament.
The German government also generally commits to coordinating its China policy closely with EU partners: “Successful engagement with China requires the weight of all of Europe.” Therefore, it supports more frequent discussions in the European Council and its various formations to contribute to a common understanding of European interests. It also seeks consultation within the EU circle during the preparation of German-Chinese government consultations.
However, Buetikofer warns that the Europe-friendly rhetoric should not be forgotten in the implementation, as was the case with the government consultations in June: The European approach was “blocked by the Chancellery“. Daniel Caspary, Co-Chair of the CDU/CSU delegation in the European Parliament, also calls for more effort from the German government to secure free trade agreements with other countries: “Those who want to reduce dependencies on China must also offer alternatives to companies.“
China’s modern idea of romance: Wind turbines line the mountain peaks outside Chongqing. In front of them, a couple in a field of flowers watching the sunset – and, of course, the obligatory electric SUV. What more could one ask for?
Today you are receiving China.Table earlier than usual in the form of a special edition on the German government’s China strategy. It was approved by the German Cabinet this morning and officially published at noon. We are already providing you with a comprehensive set of analyses on the paper.
Geopolitics: Michael Radunski explains what the repositioning means for Germany’s place in the triangle between the USA-EU-China.
Economy: The main topic here is de-risking. The German public should shoulder the risks in the stead of large companies – they are increasingly expected to bear the risks themselves and assess them realistically.
Civil society: The strategy finds clear words on human rights, says Marcel Grzanna. The paper clarifies that even those who respect China can criticize the Uyghurs’ situation.
Climate action: Environmental cooperation is an important aspect of the strategy. However, Nico Beckert sees conflicting goals between increased cooperation and greater independence from Chinese supplies.
Universities: Researchers in Germany are particularly uncertain about how to deal with China. Tim Gabel describes what guidance the strategy paper offers them.
Europe: Brussels urgently expects Berlin to deliver signals on China policy – just as Berlin wants to align its policy with Brussels. Germany’s China-critical reorientation is well received in the EU, says Till Hoppe.
Germany’s Foreign Minister Annalena Baerbock was even more frank at today’s event organized by the China Research Institute Merics than the paper the ministers adopted a few minutes earlier. Although the Foreign Ministry was in charge of its drafting, it is the joint strategy of all ministries and the Chancellery. That is why the wording sounds particularly cautious in areas where many interests are touched.
The Green minister did not hide her reservations in two directions. She clearly emphasized the aspect of China as a rival against which Germany had to brace itself. And she lashed out at the industry, which she accused of wanting to be bailed out by the taxpayer if a China crisis were to hit.
These thoughts are also reflected in the strategy, albeit more cautiously expressed. What does Beijing think of it? We do not know. The German government has not yet finished the translation into Mandarin.
It has turned out to be more concise and unequivocal than feared after the lengthy disputes within the German government: On the last day before the summer break, the German government published Germany’s first China strategy. The wait was worth it: The strategy reveals the outlines of an entirely new approach to the second-largest economy.
“China has changed – this and China’s political decisions make it necessary to change the way we deal with China,” the 64-page strategy says right at the beginning. This is a very central message to all in Germany who believe that good economic relations with the authoritarian People’s Republic can be maintained forever, while ignoring the massive increase in domestic human rights violations and the increasingly aggressive foreign policy and geopolitical changes.
“We show ways and instruments how Germany can cooperate with China in the heart of Europe without endangering our free democratic basic order, our prosperity and our partnership with other countries in this world,” said Federal Foreign Minister Annalena Baerbock (Greens) in a speech to China think tank Merics in Berlin.
Three aspects of the China strategy were particularly important to the Foreign Minister:
Above all, four groups can be identified as addressees of the strategy:
Both Chancellor Olaf Scholz and Baerbock emphasized the desire to cooperate with Germany’s largest trading partner. “We always address critical issues such as human rights, the rule of law and fair competition,” the Chancellor posted on Twitter. “We need China, but China also needs us in Europe,” Baerbock said at the Merics event. “We are realistic, but not naive.”
There had been a dispute in particular between the Chancellery and the Green-led foreign and economy ministries. Baerbock and the economy ministry led by Robert Habeck had called for a tougher line against China and companies that rely massively on business with China, namely Volkswagen, BASF, Mercedes-Benz and Siemens.
“The China strategy gives our relations a new framework,” Scholz now also wrote on Twitter. Germany wants to “avoid critical dependencies in the future.” This means that a minority stake like the one by Chinese state shipping company Cosco in an operator at the container terminal in the Port of Hamburg, which Scholz had pushed through against the opposition of the Greens just a few weeks back, will likely no longer be possible under the newly formulated China strategy.
There was no immediate reaction from Beijing to the publication of the China strategy. But the communist leadership already voiced clear criticism after Germany unveiled its security strategy a month ago. “To view and build international relations by viewing others as competitors, rivals or even adversaries and turn normal cooperation into security or political issues will only push our world towards a vortex of division and confrontation,” Foreign Office spokesperson Wang Wenbin said.
The new strategy by the German government provides guidance to businesses on how to deal with China-related risks in the future. As it also forms the basis for future regulations and other priorities in promotion, companies, and business associations will scrutinize it closely. The overarching theme is, as expected, risk minimization (de-risking). Another key topic is strengthening technical capabilities and competitiveness to better counter China.
However, the strategy also emphasizes that China is currently an important and even indispensable economic partner (section 3.4). It explicitly states, “We want to maintain economic interconnection with China.” The government continues to give companies the freedom to determine their best course of action abroad based on their own assessment.
Yet, the paper also provides a path towards a future with reduced geopolitical dependencies. The message is that companies should consider this process in their future decision-making. The government aims to “raise awareness” among companies about the risks.
One major concern of the Green Party-led ministries is the socialization of entrepreneurial risks. This issue arises repeatedly during financial crises when the state rescues important credit institutions that have previously generated high profits by taking corresponding risks. It is not just banks that are “too big to fail”. This category also includes companies such as VW and BASF, both deeply intertwined with China.
The Ministry for Economic Affairs, led by Robert Habeck, began reconsidering and scaling back state guarantees for business with China over a year ago. His party colleague Annalena Baerbock explicitly supports this approach.
The guarantees that are now set to expire have previously secured investments. For example, if a company invests billions to build a factory in an uncertain country, and the project fails due to government intervention, the German state steps in with compensation. The introduction of these guarantees was meant to encourage companies to invest globally.
However, according to the current government, these guarantees create the wrong incentives, particularly regarding China risks. As China risks are expected to decrease, it is counterproductive to provide even greater state-backed investment support. All of this can be found in section 4.6 of the China strategy. In practice, the assumption of guarantees and other support for business with China has already dramatically decreased in recent months.
Overall, the strategy sends a message to large German companies: When it comes to China, risks will be the companies’ problem, not the taxpayers’. Currently, both the Ministry of Foreign Affairs and the Ministry for Economic Affairs are undergoing a realignment. Instead of being the best partner for businesses and nurturing them, their activities are under close observation.
This also applies to the topic of investment control. While the strategy does not provide a directive for comprehensive monitoring of international investments, section 4.6 states, “We acknowledge that appropriate measures aimed at countering risks associated with foreign investments may be important in this context.” It then refers to planned EU regulations.
There is a separate section devoted to protecting critical infrastructure. These are facilities whose failure would have dramatic consequences for the community. This traditionally includes power, transportation, data and mobile networks, water supply, financial sector and even food supply.
The strategy announces a “critical infrastructure framework law” in section 4.8. The goal is the “immediate reduction of risks”. The paper does not provide details on what it will include, instead referring to future laws and ongoing agency reviews. However, the spirit of this section contradicts further involvement of Chinese IT suppliers such as Huawei and ZTE in the expansion of German data and mobile networks. It also opposes Chinese acquisitions of media companies.
The strategy paper also identifies two specific product groups in which Germany should not depend on China (section 4.2):
However, diversification should occur “at reasonable costs”.
From a geopolitical perspective, Germany’s China strategy shines with clarity at the outset. “China is attempting to reshape the existing rule-based international order in various ways,” the introduction says. And paragraph 1.4 lists how Germany intends to meet this rivalry: Collectively in the European Union and NATO with the United States. The idea of a detached, European autonomy is thus indirectly rejected from the very beginning.
Overall, it shows that the government has recognized China’s offensive geopolitical stance: Be it overtly military through a massive arms build-up or covertly diplomatic through initiatives such as the Global Security Initiative. Paragraph 5 frankly states: China is attempting “on all continents and in international organizations (…) to change the existing rule-based international order according to Chinese ideas.”
All continents and levels are listed in short paragraphs. Africa is chosen as a central goal of the EU, Latin America and the Caribbean are even praised as natural partners for Germany and Europe. Even the Arctic and Antarctica, outer and cyberspace, as well as submarine fiber optic cables and satellite navigation are mentioned. It is good that this captures the scale of the challenge posed by China. Including how China attempts to undermine the UN from within (paragraph 5.6). However, some of the wording sometimes seems detached from reality.
The German government avoids clear words in many passages. For instance, on the potential danger of US-China rivalry, it says: “China’s antagonistic relationship with the US is at odds” with Germany’s security. And China’s stance on the Ukraine war is assessed as follows: “China does not credibly defend Ukraine’s sovereignty and territorial integrity”.
Especially on this issue, more clarity would have been possible. Particularly because Foreign Minister Annalena Baerbock has done this herself in Beijing. It is striking that the geopolitical consequences of the Ukraine war are hardly acknowledged – namely the growing bloc formation of China and Russia against the West.
By contrast, the German government is more explicit on the Taiwan question. The island is mentioned a total of 13 times in the German China strategy. Right at the beginning, the government makes clear: “The One-China policy remains the foundation of our actions. Diplomatic relations exist solely with the People’s Republic of China.”
However, paragraph 5.7 states: “Any change in the status quo in the Taiwan Strait must happen peacefully and by mutual agreement”. It also supports “the relevant participation of democratic Taiwan in international organizations.”
Here, as in many other places, the task now is to turn the strategic guidelines into reality. And a number of questions arise: If, for instance, more German military presence in the Indo-Pacific is announced on paper, will German warships cross the Taiwan Strait in the future?
Overall, the geopolitical part of Germany’s China strategy breathes a bit of the spirit of the “German Zeitenwende”. It seems as if Germany is daring to become a factor in foreign policy. This would go some way toward fulfilling its responsibility as a leading European industrial nation. However, in several parts of the China strategy, it still seems as if the German government is sometimes scared of its own courage.
The 1948 Universal Declaration of Human Rights by the United Nations is a thorn in the side of the People’s Republic of China. The charter’s claim to universal validity provides a huge weak spot where an increasingly totalitarian regime like China’s can be repeatedly targeted. China’s insidious intention to present itself to the world as a friendly dictatorship contradicts the UN declaration.
The German government’s China strategy raises the hand to Beijing’s permanent watering-down tactics. “With concern, the German government views China’s efforts to influence the international order along the lines of the interests of its one-party system and, in the process, to relativize the foundations of the rule-based order, such as the status of human rights,” reads the introduction to the paper.
The strategy broadly addresses human rights issues and makes them a core factor in its own political orientation toward the country. “We cannot close our eyes to changes in China’s policies; they affect the quality of our relations.”
It criticizes the repressive policies against Uyghurs, Tibetans and other ethnic minorities, the political purge against opposition figures in Hong Kong, the treatment of freedom of expression and civil rights activists, but also women and marginalized groups. This is “a gauge of the state of a society.”
The paper does not concede a special role to China. “We respect each country’s own history and culture. At the same time, universal human rights cannot be relativized, but are inalienable and valid worldwide,” it says.
The German government views the situation of the Uyghurs in a European context. “No competitive advantages may arise from the violation of human rights. China has ratified the two fundamental standards of the International Labor Organization prohibiting forced labor; the German government attaches particular importance to their comprehensive practical implementation and is committed to ensuring that products derived from forced labor may not be traded in the European single market.”
The World Uyghur Congress (WUC) welcomed the support of an EU regulation banning forced labor products. “We, therefore, now expect politicians and companies to take effective action,” said Berlin Director Haiyuer Kuerban.
There was also approval from the opposition. China is an economic rival for the EU, not least because Beijing gains advantages by circumventing environmental and human rights standards, said René Repasi (SPD), Chair of the European Parliament’s China Delegation. A ban on products from forced labor and the European Supply Chain Act are, therefore, instruments that also ensure the assertion of European economic interests vis-à-vis China, he said.
Renata Alt (FDP), Chairwoman of the Human Rights Committee in the German Bundestag, called for a quick implementation of the paper: “It is important that the strategy emphasizes human rights and also denounces human rights violations in Xinjiang and Tibet, but words must now be urgently followed by deeds.”
The Executive Director of the International Campaign for Tibet (ICT), Kai Muller, generally welcomed the mention of the precarious situation of Uyghurs, Tibetans and Hong Kongers, but would have preferred even clearer wording to describe the extent of ‘crimes against humanity.’ “The picture is mixed, and it will depend on how the strategy is implemented specifically and whether economic and trade policies will dominate our discourse,” Mueller said.
When it comes to green technologies such as solar panels and lithium batteries and raw materials for the energy transition, there are “critical dependencies” on China that the People’s Republic has already “instrumentalized” when dealing with other countries, Germany’s China strategy warns. Consequently, it aims to diversify supply chains and strengthen “Europe’s innovative strength and production capacities, including in environmental technologies.” To this end, the “use of state resources,” i.e., subsidizing investments, is to be simplified.
The final version no longer mentions support for an “import ban from regions with particularly severe human rights violations,” as was still the case in an older leak. This could once again fuel the debate over the solar supply chain and allegations of forced labor in the Uyghur province of Xinjiang.
However, the German government cannot be too aggressive when it comes to diversification. Because if China feels threatened, it could retaliate. In January, plans to restrict exports of solar production equipment became public – and according to industry experts, the Chinese government is still discussing how to implement them in practice. And just a few days ago, China restricted gallium and germanium exports. Green industries are only affected minimally, as the two raw materials are only required for a few special solar applications. But the decision is seen as China’s warning signal: “De-risking” could pose new risks to these supply chains.
It already became apparent at the June Sino-German government consultations in Berlin that the German government wants to push China harder regarding international climate policy. “China has a special responsibility for preserving the world’s climate,” the strategy states. “The next time Scholz talks with Xi Jinping, the topic of climate will be on his agenda,” says Lutz Weischer of the environment and development NGO Germanwatch, emphasizing the high importance of the topic in the strategy.
The background: China is currently the largest emitter of CO2 by far. The Chinese climate target of reaching peak emissions by 2030 is incompatible with the Paris climate goals. If all countries were to implement similar unambitious policies, global warming would reach up to three degrees, according to the Climate Action Tracker.
For this reason, the German government wants to “encourage China to set more ambitious targets for reducing greenhouse gas emissions” in the future. Here, the government voices the clear expectation that China, as the “second-largest economy, will contribute to climate action in line with its capabilities and responsibilities.”
Climate action will become a “focus of bilateral cooperation.” In this context, the government also wants to address the coal phase-out in China. Clear demands or cooperation offers are not included in the strategy and were not decided at the Sino-German government consultations. This is because the issue is sensitive: Coal is vital to China’s energy security. Moreover, the country has a strong coal lobby. The German government also wants to use the climate and transformation dialogue with China to “make industrial processes more climate-friendly, accelerate the energy transition, and facilitate the switch to climate-friendly mobility.”
The strategy warns that China must not use cooperation on climate protection “as a leverage” to advance interests in other areas but does not go into detail.
Furthermore, the German government wants China to participate in the so-called global loss and damage fund, i.e., to provide financial resources for preventing and adapting to the climate crisis in poorer countries. Regarding climate finance, China regularly retreats to the position that, according to the official interpretation, it is a developing country and does not need to participate. China is welcome to join Scholz’s climate club if it has the “appropriate level of climate policy ambition,” the strategy states.
However, Weischer also criticizes some blanks in the strategy, such as “the reduction of methane emissions, which are important for meeting the 1.5-degree target. It also hardly mentions concrete measures and opportunities for cooperation on how China’s emissions could be reduced in the short term.”
How the strategy is implemented will now be decisive, Weischer said. “I see many tasks for the German Foreign Office and the Ministry for Economic Affairs and Climate Action, for example, on the dialogue on the coal phase-out or China’s role in climate financing.” The Germanwatch expert calls for new resources to be provided to these ministries in order to breathe life into the strategy.
In research, the German government’s China strategy aims to unite two poles: On the one hand, it wants to further develop cooperation in important fields such as AI, quantum or climate action. On the other hand, however, the risks of dual-use and one-sided knowledge transfer are to be minimized (keyword: de-risking).
What is noticeable right from the start: The tone of the China strategy is much more restrained – in contrast to the remarks made by Federal Research Minister Bettina Stark-Watzinger (FDP) after the Sino-German intergovernmental consultations. However, there is unfortunately no detail about possible implementations or concrete activities.
Whereas the research minister announced “only limited scope for new collaborations” during the government consultations with the Chinese side and urged universities in interviews to “critically scrutinize” their ties to the Confucius Institutes, the China strategy envisions “further developing science relations in a value- and interest-driven manner” and “strengthening the dialogue with universities and research institutions.”
There are no plans to closer document collaborations with China or even a central register for research collaborations, as some China experts proposed earlier this year. Instead, the German government promises to advise the scientific community on “taking precautions against risks in dealings with China and preventing the emergence of one-sided dependencies in these collaborations”.
The government claims to have recognized the risk of military use of research results: “We take into account that civilian research projects, including basic research, are also being strategically considered by China with regard to their military applicability. US security expert Jeffrey Stoff, founder and president of the Center for Research Security & Integrity (CRSI), revealed in a report how naively German research institutions and companies cooperated with Chinese institutions.
Stoff told Table.Media that governments should “provide guidelines and list things they want to warn about or restrict.” The strategy does not contain any concrete plans or offers in this regard. Presumably in order to maintain a diplomatic tone – which the Chancellery has urged in particular – the paper remains rather cryptic on these issues. It promises to strive for a “better mutual understanding of the respective funding structures and processes”.
Moreover, the German government does not want to solve many problems at the national level, but instead refers to the EU – and here above all to Horizon Europe. For example, restrictions on transnational data traffic and imbalances in access to major Chinese research institutions are listed. China had withdrawn from negotiations on uniform international regulations following the “EU-China Science, Technology, Innovation Roadmap”.
In its strategy, the German government announced talks with the Chinese government to “improve the working conditions of German science organizations in China.” Here, the updated version of the Chinese anti-espionage law recently caused unrest among science organizations and among individual researchers. The law allows China authorities to take action against foreign institutions that endanger national security and national interests.
As Table.Media has learned from Chinese government circles, this concern is met with little understanding in China. The country claims that it is still safe for German researchers to work there.
At the same time, efforts are being made to revive the exchange of researchers after the Covid pandemic. The German government China strategy is also committed to promoting Germany internationally as a place for study, teaching and research. The aim, however, is to “retain Chinese talent in Germany and Europe in the long term.”
During Chancellor Angela Merkel’s time, the German government was seen in Brussels as too friendly towards Beijing. With its China strategy paper published on Thursday, Berlin is at least on paper shifting towards the hawkish camp: De-risking is “urgently needed”, writes the German government, aligning itself with EU Commission President Ursula von der Leyen.
This is viewed favorably in Brussels. The German strategy is in line with their own approach, according to the European Commission. Reinhard Buetikofer, Chairman of the China Delegation in the European Parliament, praises the paper for providing “a realistic positioning of German policy towards Beijing” and addressing the necessary European integration.
However, the Green Party member of parliament notes that the China strategy is not the end of the necessary process of reorientation but rather the beginning: “The de-risking to which it commits itself must be filled with concrete policies.” This will not happen without contradictions and further struggles. There is resistance to distancing from Beijing, especially within the German industry.
The European Commission recently proposed specific measures in its strategy for economic security. The German government partially adopts these proposals:
In addition, the German government intends to support EU-wide monitoring of critical dependencies on raw materials and intermediate products, as envisaged under the Critical Raw Materials Act. It also commits to supporting EU legislative initiatives targeting China, such as the directive on due diligence obligations for companies to ban products made from forced labor. “The German government’s position that human rights violations should not lead to competitive advantages is particularly welcome,” says René Repasi (SPD), Vice-Chair of the China Delegation in the European Parliament.
The German government also generally commits to coordinating its China policy closely with EU partners: “Successful engagement with China requires the weight of all of Europe.” Therefore, it supports more frequent discussions in the European Council and its various formations to contribute to a common understanding of European interests. It also seeks consultation within the EU circle during the preparation of German-Chinese government consultations.
However, Buetikofer warns that the Europe-friendly rhetoric should not be forgotten in the implementation, as was the case with the government consultations in June: The European approach was “blocked by the Chancellery“. Daniel Caspary, Co-Chair of the CDU/CSU delegation in the European Parliament, also calls for more effort from the German government to secure free trade agreements with other countries: “Those who want to reduce dependencies on China must also offer alternatives to companies.“
China’s modern idea of romance: Wind turbines line the mountain peaks outside Chongqing. In front of them, a couple in a field of flowers watching the sunset – and, of course, the obligatory electric SUV. What more could one ask for?
