Merkel "looking for trouble": Germany Re-examines China Policy, Accelerates "De-risking" Strategy
On Thursday, November 13, the German Federal Parliament appointed an expert committee to comprehensively re-examine Germany's trade policy toward China. After Beijing tightened its exports of rare earths, exposing how Germany's industrial supply chains could be quickly "strangled," Berlin is accelerating its "de-risking" strategy to reduce risks associated with China.
According to Reuters, this committee consists of industry associations, labor groups, and think tanks. Unlike the previous government's "China Strategy" in 2023, which only proposed general recommendations, the new committee will present actionable policy suggestions to the German government and provide a basis for future legislation.
According to the German government, the committee will focus on reviewing sensitive issues such as energy and raw material imports and Chinese investments in critical infrastructure. At the time of the committee's establishment, German Finance Minister Lars Klingbeil is about to visit China, hoping to explain the EU's positions on multiple issues to China.
Germany has particularly felt pressure in its relationship with its largest trading partner, China this year. On one hand, US President Trump introduced a new round of high tariffs that have impacted global trade; on the other hand, China has demonstrated its ability to retaliate through export controls.
Jürgen Matthes, head of international economic policy at the German Institute for Economic Research (IW), stated: "In key areas, China has the capability and may suddenly cut off supplies, while Germany remains too vulnerable. The pressure to push for reforms is greater than ever before."
Diplomatic Visits Halted: German Awareness of "Risk Management" Increases
Klingbeil will be the first minister from the new German government to visit China. The newly appointed Foreign Minister Johann Wadephul had planned to visit China in late October, but he postponed it because Beijing only confirmed one of his requested meetings.
A source informed Reuters that a group representing German banks and insurance companies will accompany Klingbeil on his trip to China next week.
Jürgen Hardt, the foreign policy spokesperson of the ruling coalition, emphasized: "In future China policy, risk management will play a more important role. The key is to identify the levers China may use to exert pressure and find ways to avoid them."
Rare Earth Volatility Sounds Alarm: Sino-German Trade Relations Enter Adjustment Period
As a major European manufacturing and export country, Germany has long benefited from China's vast market. However, the previous government's "China Strategy" released in 2023 first explicitly called for "reducing economic dependence on China" and defined China as a "partner, competitor, and systemic rival." Although this 61-page document urged German companies to reduce their reliance on China, it lacked binding targets.
According to the latest research by the German Institute for Economic Research, the degree of critical import dependence on China in 2024 remained almost unchanged compared to 2023. Matthes pointed out: "Since the release of the 'China Strategy,' I haven't seen any real progress in de-risking in my empirical research. Events that should have sounded the alarm have not triggered sufficient reactions." Analysis shows that about 200 types of products in Germany depend on imports from China by at least 50%, and if disrupted, they could still cause significant economic impact.
After China imposed restrictions on rare earth exports, the risk of dependence on China immediately surfaced – approximately 80% of Germany's rare earth supply comes from China. In addition, the recent dispute between the Netherlands and China over the semiconductor company Nexperia has caused global supply chain turbulence, once again affecting German companies.
Source: rfi
Original: www.toutiao.com/article/1848717285073923/
Disclaimer: This article represents the views of the author himself.