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Author: Mischa Ehrhardt/DW Indonesia
BERLIN, KOMPAS.com – The economies of China and Germany have been very closely intertwined. This is a dilemma, when the political situation is full of uncertainty. Learning from energy dependence on Russia, Germany is now also trying to escape dependence on China.
French President Emmanuel Macron sparked confusion when he said that Europe should not just be a US “follower” in the US-China geopolitical rivalry. Europe, said Macron, must avoid being dragged into the US-China conflict over Taiwan.
Among German business leaders, many agree with Macron’s view. “If we don’t have relations with China anymore, prosperity in Germany will decline,” said Holger Engelmann, chief executive of automotive supply company Webasto.
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For the company, the Chinese market is very important. More than a third of Webasto’s sales are made in China, where the company has 11 factories.
China is currently Germany’s most important trading partner, second only to the United States. That is the dilemma faced by German Foreign Minister Annalena Baerbock, who is currently visiting China.
During his visit he wanted to explore more opportunities for future cooperation, but at the same time seek to reduce the dependence of German business on China.
Carsten Brzeski, economist at ING Netherlands bank, described Germany’s dependence on China as “very high”, especially regarding raw materials and semi-finished products.
“This is much higher than, for example, America’s dependence on China. And also greater than France’s dependence on China,” he told DW.
Beijing has long sought to shed its image as a “cheap assembly shop for the world.” Under the “Made in China 2025” agenda, Beijing has embarked on an industrial policy aimed at lifting its high-tech manufacturing sector to a global level.
In several sectors, this agenda has produced results. In the production of batteries for electric vehicles, for example, Chinese manufacturer CATL already supplies around one-third of all the batteries needed worldwide for electric cars.
About 80 percent of lithium-ion batteries for electric vehicles worldwide come from China.
“Without China, there would be no electric car (market),” said Carsten Brzeski, adding: “Without China, there is no energy transition, without China, there are no solar cells on our roofs.” It is clear to us that Germany’s economic development is closely tied to China’s, “especially in the short term.”
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“The Germans have little room for maneuver”, said ING’s Carsten Brzeski.
“Since the outbreak of the war in Ukraine, the first reflex has been to say: ‘We must now focus more on friendly countries and end or reduce our dependence on China.’ But that’s absolutely impossible,” he said.
In contrast, many Chinese companies have substantial interests in Germany and European markets, and have gained access through a number of acquisitions and ownership deals.
German robot manufacturer Kuka for example, a business leader in its market, was taken over in 2016 by the Chinese group Midea. Even the biggest shareholders of Mercedes Benz today are two investors from China.
Recently, however, there has been increasing concern in Germany about the extent of China’s influence. Investors from China are increasingly being viewed with suspicion, even though there have been no cases of Chinese investors not following the rules in force in Germany.
Amid rising geopolitical tensions over Taiwan, many Western governments are trying to contain Beijing’s expansion, or at least keep Chinese companies away from its domestic market and key infrastructure.
The pressure now also applies to Germany. While many observers are of the view, the German government seems to have yet to find a strategy to deal with new developments in the current global political and business world.
Also read: To Beijing, German Foreign Minister Urges China to Ask Russia to Stop War in Ukraine
This article was published on DW Indonesia under the title Jerman wants to break free from dependency on China.
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