On July 13, the German federal government under Chancellor Olaf Scholz released the European power’s first-ever Strategy on China, a 64-page document identifying Beijing as both a “systemic rival” as well as an “essential partner.”
The plan presents the German government’s public view on the “status of and prospects for relations with China” and enable the government to assert its values and interests more effectively in its “complex relationship” with the communist regime.
Its goals also include presenting “means and instruments by which the [German] government can work with China” without endangering the country’s free and democratic way of life, while also providing a framework for German federal ministries to give “coherence” to their policies on China and to “form a basis for enhanced coordination on China with stakeholders in Germany, Europe and beyond.”
The plan is the result of a pledge made by Scholz when he took office in late 2021 to table a “comprehensive China strategy.”
Germany, Europe’s largest economy, wants to maintain ties with the People’s Republic of China (PRC), the world’s second largest economy and its largest trading partner, while also addressing concerns such as Beijing’s human rights violations, increasing geopolitical belligerence, and refusal to condemn Russia’s invasion of Ukraine.
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Annalena Baerbock, Germany’s Foreign Minister, said that for Germany, “China remains a partner, competitor and systemic rival, but the aspect of systemic rivalry has in recent years increasingly come to the fore,” U.S. News reported.
“Systemic rivalry with China does not mean that we cannot cooperate,” the plan asserts, adding that, “The Federal Government is seeking to cooperate with China on the basis of fair conditions. Cooperation with China is thus a fundamental element of the federal Government’s Strategy on China.”
The plan acknowledges that Germany and the PRC “have different concepts of the principles governing the international order in important areas.”
One such area is Beijing’s human rights record, with the Strategy mentioning the Chinese Communist Party’s mass internment of Uyghurs in Xinjiang and its tightening restrictions on political freedoms in Hong Kong.
The Strategy accuses Beijing of deliberately using its economic power for its political goals, saying that “China is being increasingly assertive in striving for regional hegemony and in this process calling principles of international law into question.”
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On Taiwan, while Germany “has close and good relations with Taiwan in many areas and wants to expand them,” the Strategy notes that Berlin will continue to formally recognize the PRC over Taiwan (officially called the Republic of China) as part of its adherence to a one-China policy.
Prior to 1949, the ROC governed all of China before being pushed off the mainland by communist armies. Beijing claims Taiwan as part of its sovereign territory, while Taiwan maintains it is an independent state. The U.N. switched recognition of the “one China” to the PRC in 1971.
‘Derisking’ versus ‘decoupling’
The “Strategy on China” stresses that while China is a systemic rival, economic and trade relations with Beijing remain an important element of “bilateral cooperation.” According to the document, Germany’s federal government is committed to ensuring that this cooperation is fair, sustainable and reciprocal.
“It is not our intention to impede China’s economic progress and development,” it says adding that de-risking is “urgently needed” however, the country is “not pursuing a decoupling of our economies.”
In late June, European Union (EU) leaders committed to reducing dependence on China, with Latvian Prime Minister, Krisjanis Karins, warning that failure to do so would leave the EU vulnerable.
“What it basically says is [to] assess are we overly dependent in some way on China in trade and how to reduce so that if something changes drastically in the world we’re not left high and dry,” he said, according to Reuters.
Chancellor Scholz said that de-risking is a matter for companies to decide, not countries, and that it would take a few years for companies to diversify supply chains, potentially moving segments away from China.
In recent months, officials from the U.S. and aligned countries have preferred to use the term “derisking” in relation to China, in contrast to “decoupling.”
The CCP has criticized the usage of both terms, saying that the West seeks to isolate, contain, and weaken China on the international stage.
In response to the Strategy on China, state mouthpiece Xinhua cited Helga Zepp-LaRouche of the minor German political party Civil Rights Movement Solidarity as saying that the word “de-risking” was a semantic sleight-of-hand for “decoupling,” and that the trend was “obviously very much against the interest of Germany.”
“There is no risk coming from China. China is one of the most reliable trade partners and economic partners,” she claimed.
Relationship with China ‘essential’
The “Strategy on China” mentions the country as being “essential” to both Germany and the broader European Union at least seven times.
“[Germany] is seeking to cooperate with China, particularly as an essential actor in solving key global challenges,” the plan says, adding that China is an essential element in combating climate change and that “cooperation and intensive exchange with China are also essential with regard to the development of an ambitious international and legally binding instrument for fighting plastic pollution.”
It identifies numerous areas where Germany, and much of the developed world, have dependencies on China, including access to various metals and rare earths, lithium batteries and photovoltaics, and pharmaceutical substances.
“The Federal Government will analyse critical dependencies on an ongoing basis and supports a regular EU-wide monitoring system,” to identify vulnerabilities, the Strategy says.
German authorities also aim to create more expertise on China within the German government, saying that there is a “greater need” for people with the right language and intercultural skills within the government.
“Solid, current and independent expertise on China is essential for mutual understanding and for the long-term, successful pursuit and assertion of Germany’s interests,” the Strategy reads.