（Huang Chiu-Lung, Associate Professor, Department of Public Security, Central Police University）
Since the launch of the “China-Strategie der Bundesregierung” (China Strategy of the Federal Government, hereinafter referred to as the “China Strategy”) by the German Foreign Ministry on July 14, 2023, German Chancellor Olaf Scholz first visited China on April 14-16, 2024, and had political meetings with Chinese President Xi Jinping and Premier Li Qiang. This was Scholz’s second visit to China since his taking office in December 2021, both at a sensitive time when international and China’s situations intertwined. The latest visit lasted for 3 days, a record of Scholz’s overseas visits, comparing to his 48-hour stay in Canada for his inauguration visit in August 2022. Maximilian Butek, Executive Director of German Chamber of Commerce in East China, stressed that the length of German Chancellor’s visit in three cities has sent a strong signal of normalization of bilateral relations. However, Germany’s ambiguous attitude towards “de-risking” policy has caused dissatisfaction from the Western world and concerns about damaging the interests of Europe as a whole, as China’s inferior products haver swamped European markets, impairing the functions of the free market. In particular, China’s economy is slowing down while it accelerates investment in industries to provoke dumping actions, which has clearly shown in the 9% decline of German exports to China in 2023 and it even overspilled to the third markets in Europe and emerging countries. The China-Germany relation looks perfect formally, but there are essential problems. Noah Barkin, a senior advisor in the China practice at Rhodium Group, described the relation between Germany and China as a “perfect storm is forming” that will accelerate the competition between the two sides and make Germany take a tough stand. It means that both sides are facing internal and external problems, together with perfect storm factors, while facing political pressure to keep the situation from being worse.
As “China Strategy” is simply an appeal made by various sectors of Germany to push for a policy of de-risking to reduce reliance on Chinese market but there are no concrete measures, nor do specific goals with binding force be made. Despite the European Union and Germany regard China as a competitor systemically, Germany’s direct investment in China reached a record high of 11.9 billion euros last year. Nowadays, Scholz led a delegation of business leaders and federal minsters of Environment Ministry, Agriculture Ministry, and Transportation and Digitalization Ministry to participate in the China-Germany Economic Advisory Committee in Beijing. It shows a move towards specific cooperation in arears of climate, environmental protection, and transportation between both sides after the appealing of China Strategy, and it also highlights China’s significant role in Germany’s economy and external trade as two major manufacturing economies in the world. Furthermore, Germany is facing problems like declining GDP, insufficient economic momentum, capital overflow, federal budget dispute, and uncertainty of European economic recovery, so China has become an opportunity for German industries to further explore market and grow as the cooperation between both sides could also regulate China’s overcapacity and the touching issue of Russia-Ukraine war.
At the time when Western countries adopted tough stance against the unfair trade practices by China in industries of automobile, railways, solar energy, and wind energy, Scholz led a delegation revisited China. It shows a contradiction that Germany’s exports to China doubled the total amount of French, the UK and Itaty from 2009 to 2021. And, the four enterprises of Volkswagen, Mecedes-Benz, BMW and BSAF account for more than one-third of Europe’s total investment in China. It also gives China room for political games by using the difference among Germany, French and other European countries. Before leaving for China, Scholz issued his first post in TikTok, a social media platform, on April 8, making him another western leader openly used TikTok following US President Joe Biden and French President Emmanuel Macron. The significance of Scholz’s visit to China now is most practically important in regard of China’s regime and international politics. It is because that the European countries and the US have banned the use of TikTok due to information security concern in recent years. However, Scholz’s using TikTok has shown that politicians still need to access information and discuss political affairs through TikTok, beyond the limitations of traditional media, which means significantly. On the other hand, it implies that China could get policy leverage from Germany when being isolated with the disconnection of its supply and demand chain, leading to the division of strategic cooperation between the US and European Union against China. When Janet Yellen, US Secretary of the Treasury, visited China on Aril 4, she claimed that China’s excessive investment has caused overcapacity, far more than its domestic needs and posing threat to the interests of the US and other foreign enterprises. She also warned of trade barrier or sanction against China for China’s substantial subsidy of green energy industry and its sale of military products or dual-use goods to Russia. Consequently, China adopts different stands towards the US and Germany in dealing with touching issues like overcapacity and Russia-Ukraine war, and it even intends to contain the US through Germany and keep flexibility in its foreign strategy.
In fact, in his visit to China, Scholz was unable to deal with substantial issues including China’s economic slowdown. He should have the capability to engage in substantial negotiations with the Chinese counterpart on reducing productions and decreasing exports from China. It still lacks reciprocity in the economic relation between Germany and China and there is insufficient equality in market access. Right before the arrival of Scholz, the China-Germany Chamber of Commerce issued a survey on April 10, which revealed that around two-third of German businesses believed there is unfair competition with local Chinese enterprises and they are also at disadvantage in contacting local officials, acquiring information and applying for permits. And the German businesses lose profits for product’s quality and innovative capability due to price competition from China. It is evident that Scholz failed to deal with international risks on the disconnection of product and raw material, and the business operation risks associated with the rising tensions in the Taiwan Strait in particular, which might force the German industries in China to comply with China’s ideological line and to localize its supply chains, thus impacting their business flexibility.
（Translated to English by Tracy Chou）
