source: (c) Copyright Thomson Reuters 2022. Click for restrictions – https://agency.reuters.com/en/copyright.html
Written by Christian Kramer
BERLIN (Reuters) – In the future, the German government will take a more aggressive course against China in trade policy.
This was announced by Vice Chancellor Robert Habeck on Tuesday in an interview with Reuters news agency. China is a welcome business partner. “But if there is protectionism by the state, countermeasures must be taken to combat it. We cannot allow ourselves to be blackmailed.” The Green Party politician also said he was “inclined” to refuse entry to the port of Hamburg, the major Chinese shipping company Cosco. Chancellor Olaf Schultz (SPD) warned against the decline of globalization.
Reuters reported last week that the traffic light government is reviewing its support for German companies operating in China, but there are different positions in the coalition. Several people familiar with the operations said the Economy Ministry is considering, for example, removing government investment and export guarantees for companies operating in China. In addition, the state development bank KfW should examine whether it can reduce its credit lines for German companies’ business in China and expand them against activities in other Asian countries such as Indonesia.
Economy Minister Habek has now said that the slogan of the new strategy is no longer naive. There should be no more distortions in competition for Chinese companies or blackmail by Western companies. This will be reflected in the China strategy that the federal government is currently working on and to which the Ministry of Economy has already contributed greatly.
According to Habeck, Germany should act more defensively. “Investments from China to Europe should be viewed more critically.” The People’s Republic of China wants to buy strategic infrastructure in Europe as part of the so-called Silk Road Initiative and thus exercise influence. “We shouldn’t allow that.” As an example, the Green politician cited plans to enter Chinese shipping giant Cosco at a container terminal in Hamburg. “I tend to the fact that we don’t allow that.” Although the container port of Tollerort is only a small part of the port as a whole, China can affect trade. On the other hand, the CEO of Port of Hamburg Marketing, Axel Matern, confirmed that it was just a matter of getting into an operator. “It would be a disaster not only for the port but for Germany,” he warned.
Trade policy as an instrument of power
The fantasy of a united world with common trade is over, Habeck said before the G7 consultations on Wednesday and Thursday in Brandenburg. “We must also understand trade policy as a new instrument of power, and also as an instrument of solidarity.” However, at the same time, there should be no formation of lumps. The US shouldn’t be too protectionist against China either: “There are certain criteria that apply to everyone, and they also apply to China,” Habeck said.
Julia Hamburg, the Green Party’s top candidate in the Lower Saxony election, also announced in an interview with Reuters that if she were to take part in the government on the Volkswagen Supervisory Board, she wanted to ensure that human rights played a greater role in the group. business in China.
Economy Minister Habek was cautiously positive about China’s role in relation to Russia. After the Russian attack on Ukraine at the end of February, the volume of Russian-Chinese trade increased. But this is mainly due to energy, and China has not interfered with the acquisition of high-quality goods. China plays a mediating role, and does not take the side of the West. But they have not fully supported Russia yet.” After all, China also needs trade relations with Europe.
Habek added that there are dependencies on China, especially for raw materials, such as batteries or semiconductors. This cannot be replaced so quickly: “We are working on it.” In addition, the German export industry is highly dependent on the Chinese sales market. “If it closes, which is not to be feared, but of course it has to be considered at a time like this, we’re going to have severe sales issues. And we have to diversify there as well.” New trading partners and new territories have to be developed accordingly.
Chancellor Olaf Scholz has also spoken out in favor of diversifying German industry – but at the same time warned of the disintegration of the global economy. Schulz said on Tuesday at Employers’ Day in Berlin that the idea of deglobalization, that is, withdrawal from certain markets, put the foundation and competitiveness of the German economy at risk. “That is why I am against all those who are now promoting the idea of deglobalization. We will not do that.”
(Help by Andreas Rinke; Edited by Hans Seidenstücker. If you have any questions, please contact our editorial team at email@example.com (for politics and economics) or firstname.lastname@example.org (for businesses and markets).)