Germany, which has long been China’s closest ally in the European Union, has issued its first “China strategy” document. The document aims to guide Germany’s political and business establishment in their engagement with China, as they seek to balance economic relations with the risks posed by the Chinese Communist Party’s (CCP) increasing foreign belligerence and domestic authoritarianism.
The strategy paper acknowledges that China’s growing prosperity and achievements contrast with setbacks concerning civil and political rights. It also highlights how China restricts contact with its civil society, media, research institutes, and governmental agencies. The document recognizes that China is simultaneously a partner, competitor, and systemic rival for Germany.
The strategy paper, which provides guidance for governments, businesses, educational institutions, and politicians, will now move to Germany’s Parliament for debate in September. While the paper acknowledges the challenges posed by China, it does not recommend reining in policy or restricting China’s access to critical technology. This is significant considering Germany’s advanced industrial sector. In contrast, the United States has implemented restrictions on Chinese access to essential semiconductor technologies.
There is also some conflict within the strategy paper itself. While it argues for smarter engagement with China, it also emphasizes the need for German businesses to maintain beneficial economic relations with China and collaborate on fighting climate change.
Last year, an early draft of the strategy document leaked, suggesting significant changes in how companies must engage with China. These proposed changes included disclosing collaboration with Chinese entities and undergoing periodic stress tests to demonstrate resilience in geopolitical turmoil. However, the final document lacked any binding or quantifiable targets and fell short of recommending export restrictions.
This weak approach has been welcomed by the German business class, with the Federation of German Industries (BDI) industry association stating that more discussion is needed on the concrete design of measures. It warns against restricting entrepreneurial dynamism too much.
Unsurprisingly, the Chinese Communist Party has shown support for Germany’s new strategic document. The Chinese Embassy in Germany released a statement rejecting the idea that China causes difficulties and challenges for Germany. It also argued against treating China as a competitor and systemic rival.
While the strategy paper is criticized for being weak, merely acknowledging the risks of dealing with the CCP grants more time to Germany’s China-addicted industrial giants against their critics. It seems to be a win-win situation for those involved parties who do not intend to change the status quo.
In conclusion, Germany’s release of its first “China strategy” document indicates a shift in its approach to China. While it acknowledges the risks posed by the CCP, the strategy falls short of implementing substantial changes. The weak recommendations and lack of binding targets have been welcomed by the German business community, but critics argue it fails to address the significant challenges posed by China’s rise. The document now awaits debate in Germany’s Parliament, where further discussions and amendments are expected.