Germany Calls for De-Risking from China, but Not Pursuing Decoupling
Germany has stressed the urgent need for companies to de-risk from China, amid concerns over the impact of China’s economic strategy on global security. However, German officials have emphasized that they are not pursuing a complete decoupling of economies.
In a 64-page report published by the foreign ministry, Germany highlighted China’s strategy to make itself less dependent on other countries while increasing the dependence of international production chains on China. The report warned that this approach is having an impact on European and global security.
German Foreign Minister Annalena Baerbock, during a speech at the Mercator Institute for China Studies think tank in Berlin, described China as a partner, competitor, and systemic rival. She acknowledged that systemic rivalry has become more prominent in recent years.
Last week, China imposed export curbs on two vital chipmaking metals, seen as a warning to Europe and the U.S. in the technological war over high-tech chips. The report emphasized that China is pursuing its interests more assertively in foreign policy, attempting to reshape the existing rules-based international order.
Baerbock noted that China’s self-confidence in decisively influencing the development of the world is evident. She added that China has changed, and it is crucial to pay attention to its evolving role.
The Chinese Embassy in Germany responded to the report, saying that China hopes Germany will view its development rationally, comprehensively, and objectively. The embassy emphasized that many challenges faced by Germany are not caused by China but rather require cooperation.
The German foreign ministry’s report recognized the benefits of competition among nations and stated that Germany accepts competition with China. However, fair rules must be the basis of competition.
Germany aims to become less dependent on critical sectors, such as medical technology, medicinal products, and rare earths, according to the report. It also mentioned China’s exploitation of other countries’ dependencies in the past, citing semiconductors as an example.
The report highlighted that economic and trade relations remain essential for bilateral cooperation with China but must become fairer, more sustainable, and more reciprocal. China is currently Germany’s largest single trading partner.
While China’s dependencies on Europe are decreasing, Germany’s dependencies on China have become more significant in recent years, the report stated.
In a meeting between Chinese Premier Li Qiang and German President Frank-Walter Steinmeier last month, Li expressed confidence in the prospects of China-Germany cooperation and emphasized the solid foundation and strong dynamics of their bilateral relations.
Germany’s stance reflects the dilemma faced by many countries in managing their relations with China, balancing economic interests with concerns over security and strategic independence. The German government’s call to de-risk from China without pursuing complete decoupling demonstrates the complexities of navigating this relationship.