Despite growing calls to reevaluate Sino-Germany relations, Chancellor Olaf Scholz is fighting to hold the center ground on China policy. Prior to his trip to Beijing in November, Scholz published an op-ed where he continued Germany’s steady embrace of what he sees as stability and interconnectedness.  

Scholz’s balancing act rejected both “calls by some to isolate China . . . [or the] quest for hegemonic Chinese dominance, or even a Sino-centric world order,” and highlighted the current reality that, “China remains an important business and trading partner for Germany and Europe . . . [and] we don’t want to decouple from it.” The Chancellor did nonetheless call for a “diversification and strengthening of our own resilience,” as a response to China’s lack of reciprocity in key sectors.  

This status quo approach, which proposes few refinements along the edges, is being contested within his Ampelkoalition (traffic light coalition) government of Social Democrats, Greens, and Free Democrats. China is increasingly viewed as a threat to German and European security across the political spectrum. Under the leadership of President Xi Jinping, who has for example built a blue water navy almost from scratch, many see a more assertive China signaling capabilities and intentions to reshape the world order.  

Europe was caught off-guard by Russia’s war of conquest in Ukraine and has re-evaluated Chinese moves that may herald a new strategy. China’s desire for a naval base on Africa’s Atlantic coast in Equatorial Guinea, its deployment of warships to exercise with its Russian ally in the Baltic, and regular joint air and naval operations apparently aimed at Japan signal that Xi’s China is now able to deploy significant military force at short notice. 

Europe is also home to China’s 16 +1 forum with Central and Eastern European countries, part of its Belt and Road global infrastructure initiative. While the program has lost momentum, its aims were widely seen as unfriendly, relying as it does on so-called debt-trap diplomacy. 

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Russia’s all-out invasion in February forced Germany into an about-face on its dependency on cheap Russian natural gas. The decision and its implications have fueled internal debate within the Ampelkoalition on the bilateral relationship with China. Although Russian trade with Germany was not very significant (apart from energy), the bilateral commercial relationship with China has become a key part of its economic strategy. At present, China is Germany’s largest trading partner — the two countries recorded trade volumes of €245bn ($261bn) in 2021. Green, as well as Free Democratic federal ministers, are now openly making the case that this imbalance needs to change, and quickly.  

In a recent partial leak of a China strategy paper, the German Ministry for Economic Affairs and Climate Action, headed by Green party leader, Robert Habeck, warned that “the importance of China as an export market for many German industrial sectors as well as critical dependencies in certain . . . areas could make Germany vulnerable to blackmail and restrict its political capacity to act.”  

Concerned by “the pro-Russian attitude of China towards the attack on Ukraine,” the memo ends with a recommendation that Germany prohibits the sourcing of critical infrastructure parts from authoritarian states. This proposal, however, should not come as a surprise. The Green Party has long prioritized human rights as a key German foreign policy objective and has grown more vocal in its distrust of China. Earlier this summer, Habeck declared after the release of a report on China’s brutal treatment of the Uyghur minorities that “we are diversifying more and reducing our dependencies on China. Respect for human rights has greater weight.” These comments have been further underlined by his fellow Green party leader, Foreign Minister Annalena Baerbock, who stated that “the Chinese political system has changed massively in recent years and thus our China policy must also change.” 

The challenge in understanding Germany’s China policy ultimately comes down to discerning the intellectual underpinnings guiding Chancellor Scholz’s thinking. Shortly after his visit to China, he double-downed on his warning that “China’s rise does not warrant isolating Beijing or curbing cooperation.”  

Here, Scholz is following a long line of German Chancellors who have advocated accommodation rather than open confrontation in dealing with belligerent great powers. German foreign policy thinkers often fear the potential for unintended consequences if policy alienates authoritarian regimes, such as Russia and China. They would rather work with them through existing institutions — such as Merkel’s Wandel durch Handel (or change through trade) strategy — rather than deal with the fallout of a powerful country acting out due to forced isolation.  

Now, with inexpensive Russian energy off the table, continued uncertainty surrounding America’s resolve, and Europe’s dissatisfaction that the US appears to be prospering from energy and arms sales while it is suffering, China’s giant market of 1.4 billion consumers is hesitantly viewed as a lifeline to stabilize Germany’s economy. China skeptics and hawks within the Ampelkoalition will have to contend with these realpolitik considerations if they hope to find success in recalibrating Sino-German relations.  

Where can and should Germany go next on China? Policymakers could easily allow current trends to continue and focus on integration, stability, and growth. While this route offers immediate gains, its lack of a long-term strategic vision runs counter to the letter and spirit of Scholz’s Zeitenwende-Politik (turning point) security commitments made earlier this year in the wake of Russia’s February invasion. Additionally, the various recommendations to decouple China from Germany’s so-called critical infrastructure do not meet the task at hand — which is to lessen overall dependence. This will require the federal government to conduct a full economy-wide evaluation of how its export-led economy can diversify beyond its reliance on China’s growing middle class. Furthermore, Germany will need to take a larger leadership role on this issue across the continent, particularly through the European Union.  

This should include a reevaluation of current trade arrangements, capital for needed infrastructure projects for member states, and diplomatic efforts to garner support for a more economically independent Europe. Germany’s first National Security Strategy, to be released in the coming months, will be a good starting point for clarifying the current coalition government’s approach to Sino-German relations. The question now is will it live up to the moment? 

Aaron Allen is a Non-resident Senior Fellow with the Democratic Resilience and Transatlantic Defense and Security Programs at the Center for European Policy Analysis (CEPA). He was most recently a National Security Fellow with the Robert Bosch Stiftung where he worked for the German Coordinator of Transatlantic Cooperation in the Bundestag and Auswärtiges Amt in Berlin. Previously, he worked in the US House of Representatives as a foreign policy advisor.

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