How Germany’s new government should change its China policy

Sebastian Biba

The Reichstag building.
Photo of the Reichstag building, Berlin, Germany taken on March 22, 2021. Photo by Peter Simons via Flickr.

Given the intensifying conflict between the United States and China, how the next German government manages its relationships with these two rival heavyweights is of critical importance.

Germany’s approach under outgoing Chancellor Angela Merkel has been to maintain amicable relations with both Washington and Beijing at the same time. However, this approach now faces growing difficulties. In particular, there are several challenges when it comes to preserving Germany’s partner-like relationship with Beijing. But what exactly are these challenges and how should the next German government respond to them?

Key challenges

The first challenge emerges due to a changing domestic political atmosphere in Germany. The new coalition forming the German government, a so-called ‘traffic light’ coalition (featuring the Social Democrats, Greens and Free Democrats), will consist of partners less coherent in their foreign policy outlook than past coalitions under Merkel. This is also the case regarding China. While Olaf Scholz, Germany’s incoming chancellor, has indicated that he would largely continue Merkel’s pragmatic China policy, the Greens and Free Democrats champion a less accommodating and more values-driven approach towards Beijing. Furthermore, there are now a growing number of voices from all major parties in Germany that aim to overhaul the current ‘economy first’ rationale vis-à-vis China. Even parts of the German business community have echoed these sentiments, openly acknowledging value-based limits for economic cooperation with autocracies like China. Lastly, Germans’ image of China has plummeted since the events in Hong Kong and the outbreak of the global pandemic.

A second challenge awaits at the European level. Despite recent signs of cautious re-engagement, there is increasing ‘China fatigue’ within the EU bureaucracy, especially following what many in Brussels see as disproportionate Chinese countermeasures after the EU sanctioned China over human rights abuses earlier this year. This negative sentiment is strongest within the EU Parliament, which has delayed the ratification of the Merkel-supported EU-China Comprehensive Agreement on Investment, and has been the main driver behind recent EU attempts to strengthen its ties with Taiwan. This hardening stance within the EU is compounded by the current China policies of individual EU member states such as Lithuania which seem to be increasingly confrontational vis-à-vis China.

Those two challenges are closely related to a third challenge, namely how to respond to an increasingly divisive United States. Germans breathed a sigh of relief when Biden won the US presidential election, and Biden has since engaged in a ‘charm offensive’ towards Berlin, halting Trump-ordered troop withdrawals from Germany and compromising on the Nord Stream 2 pipeline. But Biden has likewise rhetorically divided America’s world into ‘democratic friends’ and ‘autocratic enemies’, thereby seeking to enlist its allies, including Germany, in its great power competition with China. This has already put a lot of pressure on Germany to show its colours.

The fourth and final challenge comes from China itself. Above all, the question remains whether an optimistic German China policy based on the assumption of partnership is still warranted in light of China’s own behaviour. Longstanding disagreements between Germany and China over human rights aside, the previously vaunted economic symbiosis between the two countries has obviously become much weaker. In fact, China’s ‘dual circulation’ strategy raises doubt as to whether Chinese leaders will ever create the level economic playing field at home that German businesses hoped for. The strategy may imply that China has already launched a gradual process of decoupling itself from Western economies. Even in the realm of climate change, usually emphasized as a remaining area of partnership, it is far from certain that Sino-German teamwork will prevail over playing bilateral hardball.

The way forward — focus on competition

Considering these growing challenges to maintaining amicable relations with China, the next German government should modify the country’s China policy. Since 2019, it has been common in Berlin and Brussels to see China as a partner, competitor, and rival concurrently. While Merkel’s approach has always focused mostly on partnership, recent trends show that the rival component has gained a lot of traction in Germany and across Europe. The new German government should abandon this tripartite approach and shift to treating China solely as a competitor. This would have three key advantages.

First, it would provide for a coherent German China strategy that could be put into practice more easily than a compartmentalized endeavour. While a compartmentalized approach tends to create various bureaucratic silos, a clear-cut focus on competition would allow for a consistent and much-needed whole-of-government approach. It would also be aligned better with the emerging realities as described above. Treating China as a competitor across the board would be in sync with the growing desire in Germany to get tougher on China.

Second, it would make Germany’s position more readily acceptable for the majority of its European partners as well as the United States. In particular, it would increase the chances for a more unified EU China policy, which is clearly the order of the day. Only a more unified EU can weather the ‘China challenge’, and Berlin is crucial in leading the process towards such unity. But while a continuation of Merkel’s partnership-first approach vis-à-vis China would be hard for Germany’s European partners to sign up on these days, the focus on competition could come a long way.

Finally, it would avoid burning Germany or Europe’s bridges to China. Turning China into an enemy, as the rivalry approach implies, would be unnecessary and unwise — not least given the current political climate in the United States where Donald Trump’s potential return to the presidency looms large. Treating China as a competitor can but does not need to be based on zero-sum thinking and would therefore leave enough room for interest-driven and rules-based cooperation, while doing away with naïve or overly hawkish approaches. While the Chinese side will not immediately react positively to such an approach, it may eventually come to appreciate the mutual benefits of its honest and straightforward modus operandi.

Sebastian Biba is a Research Fellow at the Institute of Political Science of the Goethe University Frankfurt, Germany.

His article, ‘Germany’s relations with the United States and China from a strategic triangle perspective’ was published in the November 2021 Issue of International Affairs.

All views expressed are individual not institutional

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