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Is Germany Prepared to Turn Its Back on China?

The question of whether Germany is prepared to break ties with China is a complex and nuanced one. Recent developments indicate that the answer to this question is a resounding "no."

The stance of German officials, including Chancellor Olaf Scholz, reflects a pragmatic approach that prioritises economic interests and cautious diplomacy. To understand this stance better, we must delve into the economic and political context that shapes Germany's approach to its relationship with China.

There have been several difficulties for the German economy, including its entry into a recession in the first quarter of the year. Energy-intensive industries all around the nation have been hampered by the abrupt end of cheap Russian gas. To take advantage of the considerable green technology subsidies provided by the United States under the Inflation Reduction Act, some of the biggest German companies have also relocated their investments abroad.

Furthermore, German authorities have become even more risk-averse as a result of the increase of far-right views in the country and worries about the prospective comeback of former US President Donald Trump. Germany's opinion of China has been shaped by the shifting economic situation.

According to a Pew Research Centre survey, 74 percent of Germans have an unfavourable attitude toward China, reflecting a dramatic shift in the general public's viewpoint. The "win-win" narrative that formerly dominated economic cooperation between Germany and China is increasingly crumbling, especially as Chinese electric car makers, like BYD and Nio, surpass longtime German competitors in the automotive sector.

Scholz and his group are in a situation where they can't afford to alienate Beijing completely, despite the rising criticism and hostility against China. Germany has adopted a cautious and non-confrontational approach due to the difficulties presented by the domestic economic crisis as well as the requirement for stability and continuity in leadership.

This shifting approach does not, however, imply that Germany is completely uninvolved in its relations with China. Germany's dedication to its China strategy will be shown by a number of important indications in the upcoming months. Concerns have been raised about Germany's deviance from EU security standards in relation to one crucial test for 5G technology. A key litmus test for Germany's adherence to its China strategy will be the government's decision about Huawei's participation in its 5G network.

Furthermore, Germany's endorsement of the EU economic security strategy, as put forth by Ursula von der Leyen, President of the European Commission, will be a revealing indication of its readiness to fully participate in the EU's collective approach to China. The new approach attempts to control outbound investments to China in delicate national security areas and seeks to prevent cutting-edge technologies from being utilised for military purposes by geopolitical adversaries.

Germany should take the lead in the policy discussion within the EU rather than obstruct it, as it has the largest economy in Europe and the tightest economic ties to China. Germany can demonstrate its commitment to defending European interests while interacting positively with Beijing by actively participating in formulating the EU's stance towards China.

Germany should not be afraid to deepen economic and investment links with its friends either, especially the United States, even as it attempts to set clear boundaries in its technological partnership with China. The need for a transatlantic trade deal that does away with industrial tariffs and acknowledges transformational technologies emphasises how crucial it is to keep up economic ties with countries that share similar values.


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