After Xinjiang Revelations, Germany's Ties to China Are Under the Microscope
after xinjiang revelations, germany's ties to china are under the

After Xinjiang Revelations, Germany’s Ties to China Are Under the Microscope

China experts believe the German economy is falling into a “turkey trap.” Fattened by the feed from the People’s Republic, many companies don’t realize that they are already destined for slaughter. “The situation is still being played down,” says Max Zenglein, an economic expert at the Mercator Institute for China Studies (MERICS) in Berlin.

During the Merkel era, politicians gradually moved away from the overly simplistic slogan of “change through trade.” At the same time, though, Berlin maintained that it viewed economic relations as a way of compensating for the growing political tensions with Beijing. “The current German government is having a hard time moving away from the Merkel way,” Zenglein says.

This is even more true for individual companies. Some seem to be ignoring the advice of experts to reduce business with China in favor of other trading partners in Asia. On the contrary: According to a survey conducted by the Frankfurter Allgemeine Zeitung newspaper, the Stuttgart-based Daimler Group is even planning to further increase its sales in China. Meanwhile, the optics company Carl Zeiss continues to see China as a “growth market” towards which it is “strategically directed.”

To protect themselves from the geopolitical risks of doing business in China, some corporations are adopting a regional strategy, concentrating production on local suppliers and customers to immunize themselves against trade wars and political conflicts. But that won’t work in a pinch, warns Katrin Kamin of the Kiel Institute for the World Economy, a respected German economic think tank. “If the economic conflict or geopolitical confrontation intensifies, production in China could become impossible.”

An Example for other European Countries

The growth of Germany’s economic ties with China over the years has also impressed other European countries. With some delay, French, Italian and Spanish politicians and managers also followed the German example. London and Beijing even proclaimed a “golden age” in Sino-British relations under then-Prime Minister David Cameron in 2015. But it didn’t last for long.

Former Australian prime minister and Sinologist Kevin Rudd argued in an interview with DER SPIEGEL last fall that that Europe’s China logic in recent years has been pretty simple: “First, China is a security problem for the United States and its Asian allies, but not us in Europe. Second, China presents an economic opportunity for us in Europe, which should be maximized. And third, China represents a human rights problem, which occasionally we’ll engage in with some appropriate form of political theater.”

Unlike, the United States, where China policy is one of the few issues that unites Republicans and Democrats, in Germany it is colored by party and the ministries they each lead. In the final years of Merkel’s government, a somewhat more brash Foreign Ministry, headed by the center-left Social Democratic Party (SPD), repeatedly faced off against the more China-friendly Chancellery and center-right Christian Democrat-led Economics Ministry and didn’t shy away from disputes.

The two ministries, for example, fought for a year and a half over the allocation of 5G mobile communications licenses. Miguel Berger, a state secretary in the Germany Foreign Ministry, was urging for the law to be written in such a way that the controversial Chinese network supplier Huawei could be excluded from the licensing process. The Chancellery, on the other hand, was opposed to such an exclusion, and the discussion dragged on, although the Foreign Ministry did prevail in the end.

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