In detail: Germany’s new strategy to counter Chinese dominance

In our contemporary world, economic and political relations between the West and China witness an ongoing struggle and competition. Despite the West’s insistence on its ability to impose policies on other countries, China continues to reject this approach, emphasizing the importance of respecting national sovereignty and non-interference in the internal affairs of nations.

At the latest NATO summit, Germany led efforts to hinder Ukraine’s accession to the alliance, while simultaneously implementing a new strategy for future engagement with China.

This strategy comes as a result of growing concerns in Berlin over the increasing dependence of the German economy on China. These concerns have been further exacerbated by trade tensions with the United States, prompting many countries to reevaluate their reliance on China as well.

Where China is Germany’s largest trading partner, the volume of trade between the two countries reached approximately 300 billion dollars last year.

Germany heavily relies on China to secure its economic needs, and the vast Chinese market is a primary target for German companies that heavily depend on it to market their products.

As an example, 40% of German car sales are consumed in China, raising political concerns and fears of a disruption in relations between the two countries.

It is evident that the Chinese economy and the German economy are closely intertwined to an extent that makes it difficult to separate them from each other.

For example, the Chinese company “CATL” alone supplies about one-third of the electric vehicle batteries in the world and owns factories in Hungary and Germany.

Approximately 80% of lithium batteries used in electric vehicles worldwide are produced in China.

With China’s focus on the economy of the future and artificial intelligence technology, the Chinese company “Media” acquired the leading German company “Kuka” in the industrial robotics industry in 2016.

In addition, the Chinese company BAIC and businessman Li Shufu each acquired 10% of the shares of the German company Mercedes.

These events highlight the deep interconnection between the Chinese and German economies to an extent where it becomes difficult to imagine their separation.

As the modern world shows, we are living in an intricately interconnected economic era, where countries and companies must make wise strategic decisions to address the challenges related to this interdependence and strive towards a sustainable and prosperous future.

Amidst the global economic transformations, the discussion about the crucial relationship between Germany and China is gaining momentum. Carsten Brzeski, Chief Economist at “ING Germany,” pointed out that without China, there would be difficulties in developing the electric car industry, transitioning to alternative energy sources, and even widespread adoption of solar cells.

Based on that, it becomes difficult to sever economic relations with China at the present time.

The German Strategy to Confront China

In detail, the new German strategy to confront China's dominance

As Berlin faces multiple challenges in its relationship with Beijing today, due to internal factors and geopolitical tensions affecting the Western-China relations, the German government has been compelled to develop a new strategy for engaging with China.

The intensive discussions about this strategy lasted for over 83 weeks and witnessed meticulous examination and scrutiny within the corridors of the German government.

Finally, the German government has issued a new strategy aimed at dealing with China in a manner that reduces risks and overdependence on Beijing.

This 64-page strategy comprises a set of objectives that align with the European Union’s directions to reduce reliance on China and decrease the volume of trade with them.

This step comes as a result of the economic challenges facing China and its stance towards the crisis in Ukraine.

It is important to note that this position also reflects the principles and policies of Chinese foreign policy, showcasing China’s ability to make decisions independently without being subservient to any other country.

Those situations contributed to avoiding engagement in a third world war, as the alliance of China with either side of the other two parties would have meant defeat for the opposing party or even the use of nuclear weapons, which would be catastrophic on a global scale.

Over time, it has become evident that Ukraine and European countries are the most affected by the war, while China is considered one of the least affected countries due to its heavy reliance on domestic production and its ability to adapt and be self-reliant.

Due to this scene, significant concerns arise in Western countries regarding their partnerships with China, especially as these partnerships grow and become a source of worry for those nations finding it difficult to reduce their reliance on China. The trade balance is being closely monitored with apprehension, as it heavily tilts in Beijing’s favor.

In November of last year, the German Chancellor, Angela Merkel, visited Beijing on an important and politically significant economic visit.

That visit coincided with significant criticisms from both domestic and international quarters towards the German government, due to its increasing reliance on China, particularly in light of the energy crisis faced by Germany because of its heavy dependence on Russian gas.

German Chancellor Angela Merkel faces significant challenges related to the “dependency and subservience dilemma,” stemming from her previous policies that heavily relied on cooperation with Russia, leading to a reduction in Germany’s political decision-making independence.

In this manner, Germany’s current announcement comes just one month after declaring its comprehensive national security strategy, aiming to confront the growing military, economic, and social challenges the country faces when dealing with China.

This new strategy is considered the first of its kind in modern German history, aiming to define the country’s priorities and ambitions in Europe, following the broad geopolitical shifts that emerged as a result of the Russo-Ukrainian conflict.

The German government has expressed its dissatisfaction with China’s actions, which contradict its interests and values, within the framework of its national security strategy. China is seeking, through various means, to restructure the rules-based international order and increasingly claims regional sovereignty in a manner that opposes German interests.

According to the document, regional stability and international security are facing increasing pressures, as China deliberately utilizes its economic power to achieve its political objectives.

However, the document also indicates that China remains an indispensable partner in confronting international challenges and crises.

The issuance of this strategy comes just days after the visit of the Chinese State Councilor, Li Chang, to Germany following his assumption of office, during which he held talks with the German Chancellor, Olaf Scholz.

It is worth mentioning that the postponement of the release of this strategy for a long period is attributed to the disagreements between Schultz and the Foreign Minister, Analina Perbook.

The following German strategy includes essential features portrayed creatively and professionally:

  • A comprehensive document consisting of 64 pages has been created, focusing on “Methodical Competition” with the Asian giant, aiming to reduce the risks associated with China’s economic dependency.
  • Highlighting Germany’s desire to collaborate with China in tackling climate change challenges and preserving trade relations.
  • Germany confirms its commitment to making economic cooperation with China “more fair, sustainable, and reciprocal.”
  • She rejects the idea of “separation from China,” but emphasizes the necessity of “diversification” for supply chains and export markets to reduce vulnerability to external shocks.
  • “It indicates that China’s reliance on Europe is decreasing, while German reliance on China has been gaining increasing importance in recent years.”
  • She emphasizes her lack of desire to hinder China’s economic and developmental progress, but simultaneously emphasizes the necessity of addressing the risks associated with the cooperation between the two countries.
  • Germany confirms that it is not seeking to separate its economy from China.
  • The German government requests cooperative companies with China to “carefully monitor developments, data, and risks related to China.” It emphasizes the necessity of conducting “confidential discussions with companies specifically dealing with China to analyze associated risks and determine appropriate actions in a timely manner.”
  • Germany affirms that it will not sever its ties with Taiwan and aims to expand those relations.
  • The German government is taking stringent measures to counter all “cyber and digital espionage and sabotage activities” carried out by Chinese intelligence agencies and affiliated groups, whether these activities take place within Germany or are directed against it.
  • Germany announces that it will not commit the same previous mistake by heavily relying on Russian gas, which led to supply disruptions due to the conflict in Ukraine. Consequently, it is seeking to provide multiple options to avoid similar crises in the future.

The German strategy manifests as an embodiment of power equilibrium and its impact on the new multipolar world that has gradually emerged in recent years in a creative and professional manner.

Berlin no longer sees China as merely an economic partner to cooperate with but has become a significant threat on multiple levels to the West.

This strategy directly reflects the misguided policies adopted by Europe towards China following the Ukrainian war. China’s reaction has been provoked due to the heightened tensions displayed by some European countries, especially Germany, towards Beijing after the Ukrainian war.

In this context, China proposes the idea of partnership, economic integration, and trade exchange, but it constantly faces rejection and skepticism from Europeans.

The relationship between China and Europe is witnessing a noticeable contraction. Recently, the supplies and facilities that China used to provide to Europe have decreased, especially as it used to be the primary source of raw materials.

In conclusion, it appears that the declared German strategy for dealing with China in the future remains ambiguous and lacks clarity, as it does not specify how its objectives will be achieved. This has prompted German companies to criticize it and demand sufficient clarifications from the government regarding the strategy.

For example, Holger Engelman, the manager of “Webasto,” an automotive spare parts manufacturing company, considers that the loss of China would lead to a decline in prosperity in Germany. One-third of the company’s profits depend on production in China, where they own 11 factories.

The new strategy is expected to have a negative impact on Europe in general and on Germany in particular, especially given the economic crisis Berlin is currently facing and its essential need to deal with China as a key partner after losing Russia.

It is necessary for the West to realize that it can no longer impose its will on other countries, and this is the stance consistently taken by China. China calls on those nations to respect its sovereignty and not interfere in its internal affairs.

The policies adopted after the Cold War are no longer suitable for altering the balance of power on the international scene.

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