Will Germany Buck the EU’s De-risking Policy?

All in all, despite the differing views on Ukraine, Taiwan and the South China Sea, Chinese media coverage of German Chancellor Olaf Scholz’s visit to Chongqing, Shanghai and Beijing one week ago was positive. The presence of so many German industry leaders was portrayed as beneficial for both sides, while Scholz’s statement in support of Chinese e-car exports to Europe and against potential decisions by the European Commission to ban them was welcomed by the Chinese as a strong “no” to the EU’s “de-risking” strategy aimed at discouraging industrial investments in China.

At the joint press conference with the Chancellor, President Xi Jinping chose not to mention the differences, but rather stressed the role of close cooperation: “Together we can breathe more stability and security into the world”, he said. As long as bilateral relations “adhere to the principles of mutual respect, seeking common ground despite differences and learning from each other”, they should “continue to develop stably”.

The assessment of Frank Sieren, a China-based German journalist, is that Scholz has discreetly buried the China Strategy of both the EU and his own government. “Scholz has now adapted his policy to reality. He distinguishes between what is desirable for good reasons and what is feasible”, writes Sieren in the April 18 Berliner Zeitung. His trip to China “was therefore no longer about less cooperation but, as in the past, about the conditions under which we can work together more closely economically. This is why [Green] Foreign Minister Annalena Baerbock, [Green] Economy Minister Robert Habeck and FDP leader Christian Lindner were not part of the delegation.”  

Indicative of the Chinese media coverage of the role of German industry was the Global Times, which gave a broad platform to statements by officials such as Maximilian Butek of the German Foreign Chamber of Commerce in Shanghai: “The automotive industry is not just made up of manufacturers, but also suppliers. And if you ask them, they are actually doing quite well. The market shares that the German car manufacturers are losing and giving up to Chinese manufacturers can be covered by the suppliers. If you look at the Chinese manufacturers, there is a lot of German technology from German suppliers in them.”

Markus Steilemann, the CEO of German materials manufacturer Covestro, whose Innovation Center in Shanghai was visited by Scholz, noted that “Our decades-long presence in China epitomizes the spirit of Sino-German collaboration, which has been strongly beneficial for both sides”.

Ola Källenius, chairman of the board of Mercedes-Benz Group AG, is quoted as saying that China “plays a pivotal role in Mercedes-Benz’s global strategy, serving not only as home of our largest market and one of our largest manufacturing sites but also one of our global centers for technological innovation.”

And Maximilian Foerst, president of German optical giant ZEISS Greater China, commented that “The Chinese market has been not only one of our most important markets, but also a key driver of our global growth in recent years.”

As was noted in official data on both sides, China was Germany’s biggest trading partner for the eighth straight year in 2023, while Germany was China’s biggest trading partner in Europe for the 49th consecutive year.