German industry does not even dare to criticize China
The new federal government wants to adopt a new, tougher tone towards China. In German industry, on the other hand, people shy away from clear commitments to Western values and instead still hope for an old motto that has long since been refuted.
DAfter the change of government, German industry is not only dealing with a new economic and climate policy in Berlin, Annalena Baerbock also wants to change foreign policy as the new head of the Federal Foreign Office. For the Greens politician, this also includes a new economic relationship with China, one of the most important trading partners of German industry. Among other things, Baerbock wants to enforce an EU import ban on products that were manufactured using forced labor.
But in German industry this harder line towards the People’s Republic is by no means undisputed. Problems in China “cannot be solved by a confrontational foreign policy,” said Siemens CEO Roland Busch in a recent interview with the “Süddeutsche Zeitung”.
“If export bans are imposed, this could mean that we can no longer buy solar cells from China – then the energy transition will come to an end at this point.” China is rightly a self-confident country. “In 20 years, it has lifted a billion people out of poverty and established a veritable middle class,” says the Siemens boss.
But does the rest of the industry see it that way too? The President of the Federation of German Industries (BDI), Siegfried Russwurm, avoided a clear positioning on the new China question on Thursday.
He also stated, particularly with regard to China and Russia, that “geo-strategic tensions” have increased, and that there is a “completely different understanding of society” between the West and the communist People’s Republic.
For example, the Chinese would interpret longer decision-making processes in democracies as a weakness of the West, including when dealing with the pandemic. Nevertheless, one must work together with China on global issues such as climate change and trade should not be restricted. “Companies cannot push for change as proxies,” said Russwurm. That is the task of politics.
The BDI President emphasized that he was in agreement with Siemens boss Busch when it came to China – even if he would choose different words. Russwurm also emphasized that one should not forget that China has lifted hundreds of millions of people out of poverty.
“It is certainly not better to say that we want a China back where a billion people live in poverty,” Russwurm said. “But that must not be a justification for human rights violations.”
The industry is thus counting on a continuation of the maneuvering through in relation to the People’s Republic. Russwurm even tried again to hope for “change through trade”, which, however, is largely regarded as having failed.
“There is no guarantee of change through trade, but there is a chance,” said the BDI President. This would immediately result in a double opportunity – for change within China and for exports for German industry.
BDI cannot risk the huge sales market of China
It is obvious that the BDI does not want to and cannot risk the huge sales market of China. The People’s Republic has long been the most important sales market for many sectors.
In any case, the industry is worried about the weak growth in exports overall. The BDI is only assuming an increase of four percent in exports this year, and in 2021 the growth would have been twice as high.
Overall, according to estimates by the industry association, gross domestic product will probably increase by 3.5 percent in 2022. This is still lagging behind the pre-crisis level, emphasized Russwurm.
It is also not enough to go back to the economic performance before the corona pandemic. The industry had already recorded a weak production year in 2019, before the outbreak of the virus crisis.
The aim must therefore be to finally achieve more growth again. For 2022, however, the BDI expects another “stop-and-go year” due to the pandemic. Under no circumstances should Corona grow into a “chronic economic and social crisis”, warned Russwurm and therefore advocated the introduction of general vaccination.
In addition, the new federal government must implement its reform and transformation plans quickly in order to ensure new growth. Russwurm emphasized that this can be reconciled with climate protection. “Germany as an industrial country – there is no alternative to that,” he said. “The path to a climate-neutral industrialized country is possible, but it’s a pretty narrow one.”
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