German Media: Wake Up, Europe!

A commentary from Süddeutsche Zeitung writes that tariffs and trade barriers alone are insufficient to meet the challenge from China, and the EU’s urgent task is to develop a unified and enduring strategy toward China. Frankfurter Rundschau criticizes the German government’s China policy for remaining consistently vague—constantly talking about reducing dependence without taking concrete measures.

Süddeutsche Zeitung comments that European politicians are now endlessly discussing the "China Shock 2.0," as if it were an unforeseen event. In reality, China had already launched its "Made in China 2025" initiative as early as 2015, meaning the challenges from China are neither sudden nor unexpected. The commentary titled "The Road Toward a Unified China Strategy" states:

"Wake up, Europe. The EU now needs new tools to counter the devastating competition coming from China—not only because it's necessary, but because it's already somewhat too late: these anti-subsidy and anti-dumping instruments are not sharp enough, and their effects will take a long time to emerge. Meanwhile, the protective measures proposed by the EU against the influx of Chinese imports are far too vague. What the EU truly needs are American-style tools to respond firmly to unfair trade practices."

But none of this constitutes a real China strategy. The problem for the EU is that it lacks a coherent China strategy. Member states differ widely in their willingness to engage with China, depending on their distinct economic interests. Germany, long intoxicated by its title as the world’s top exporter,

has historically favored a moderate China policy due to its reliance on and concerns about the Chinese market. After all, Germany would be the first to suffer if China retaliates. Spain has also remained hesitant, fearing the loss of investment from China. Spain’s stance has, in turn, influenced a number of smaller member states.

Süddeutsche Zeitung notes that facing mounting trade deficits with China and job losses under competitive pressure from Chinese products, the position of all member states toward China has now shifted—even Germany’s staunchly moderate voices on China have begun adjusting their stance:

"A sound China strategy must be based on consensus across EU nations and must address multiple levels. The EU cannot win a trade war against China, given its high dependency on Chinese raw materials and intermediate goods. The EU needs precisely designed tariff barriers—ones that Beijing won’t perceive as escalations, yet still effectively protect European businesses. Beyond that, the EU should impose certain restrictions on investments from China, just as China has long done with foreign enterprises. In short, the EU must reduce its dependency on China."

Although time is running out for European industry, this entire endeavor will remain a long-term project. Indeed, solidarity and endurance have never been the EU’s strong suits. But faced with such a 'bet for the century,' the EU must do its utmost. The EU doesn't just need to craft a unified China strategy—it must also attract allies like Canada, Japan, and South Korea. In this process, the German government must play a pivotal role. The future of German industry hinges on Germany’s China strategy."

The Gap in Germany’s China Policy

Just after the G7 summit set a target to reduce single-country supply shares (referring to rare earths) below 60% by 2030, German Chancellor Merz declared that Germany would never establish import quotas. Frankfurter Rundschau questions whether Germany even has a clear China strategy:

"Chancellor Merz sometimes praises China as a close partner, at other times he criticizes the state-driven export surge from China that has placed Germany in a 'serious competitive disadvantage.' In sum, his China stance seems inconsistent—and confirms the impression he gives in other policy areas: Merz adjusts his position according to context and audience sentiment."

Merz’s ambivalent remarks on import quotas come as no surprise. As chancellor, he clearly understands that binding quotas would provoke strong backlash from the business community. Once import quotas are implemented, German corporate leaders would bitterly complain about this 'planned economy' approach. Yet one undeniable fact remains: calls for 'de-risking' have largely fallen on deaf ears in the business world. Companies continue to naively assume that governments will always step in during crises.

Yet de-risking is a necessary cost. Governments must establish partnerships for raw material supplies with other countries, while businesses must sign agreements with diverse suppliers, build broad supply networks, and maintain essential stockpiles. It remains unclear who should bear the additional costs—state, companies, or consumers. But given the ongoing geopolitical conflicts around the world, Germany has no alternative to de-risking."

Source: DW

Original: toutiao.com/article/1868464358754304/

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