Berlin’s long-awaited China strategy speaks of a ‘threat’ by Beijing but is softer than a previous draft.
July 13, 2023
The document had been eagerly awaited by politicians and businesses across Europe | John Macdougall/AFP via Getty Images
BERLIN — Germany on Thursday released its first China strategy, accusing Beijing of "grave violations of human rights" but taking a softer line on economic measures like investment bans.
"Without China, we will not succeed in curbing the climate crisis, nor in achieving more fair prosperity in the world," Foreign Minister Annalena Baerbock said as she presented the strategy at the MERICS China think tank in Berlin.
However, Baerbock also raised the need “to protect our European economy against unfair competition” from China, making an indirect reference to Beijing's "Made in China 2025" industrial strategy and massive state subsidies for key sectors like electric vehicles.
The strategy describes such unfair practices as a “threat” to Germany’s “security, sovereignty and prosperity.” Concretely, the document warns that "China strives to create economic and technological dependencies in order to then use them to achieve political goals and interests."
It also cautions, like Germany's National Security Strategy released last month, that "China is increasingly aggressive in claiming regional supremacy" and "challenging principles of international law."
The document had been eagerly awaited by politicians and businesses across Europe and beyond keen to see how the EU's biggest economy is repositioning itself in relation to the economically important but increasingly assertive China.
While Baerbock’s hawkish foreign ministry drafted a toughly worded first version late last year, the final version was softened — particularly regarding investments by German companies in China — reflecting Social Democratic Chancellor Olaf Scholz's more moderate line toward Beijing.
De-risking, the German way
Scholz has called for Germany to “de-risk” its economic dependency on China — its largest trading partner — but argued that this was a task primarily for companies. That puts him at odds with the European Commission's more strident line in a proposed EU economic security strategy that foresees interventions such as banning companies from manufacturing sensitive technologies in China.
Notably, the strategy no longer includes earlier proposals to introduce a “reporting obligation” and “stress tests” for companies that are particularly exposed to China. Instead, the final document says that the government will seek to “raise awareness” and “intensify exchanges” but “expects” that companies manage risk by themselves.
Whether the majority of German companies — which invested a new record sum of €11.5 billion in China last year — will really do so on their own is questionable, though.
When it comes to the proposed EU investment ban, the strategy merely notes that such a measure “could be important” and that Berlin “will engage constructively in this EU process.”
Scholz has called for Germany to “de-risk” its economic dependency on China but argued that this was a task primarily for companies | Patrik Stollarz/AFP via Getty Images
The strategy is clear, though, that an EU investment agreement with China — which had been pushed forward by former Chancellor Angela Merkel but has been put on ice for the past two years — “cannot take place at present for various reasons.”
On Taiwan, the text stresses that "any change to the status quo in the Taiwan Strait can only happen peacefully and with mutual agreement."
The strategy is toughest on human rights, lambasting Beijing over the “grave” violations of the rights of Uyghurs in Xinjiang as well as the situation in Tibet and Hong Kong, highlighting “the situation of ethnic and religious communities, and the significantly worsened situation of human rights defenders.”
The document said that Germany wants to coordinate its China policy with the EU and supports the application of EU sanctions against Beijing “in the event of serious human rights violations.”