Germany’s China Strategy: “Wash me, but don’t make me wet!”

China, Geopolitics and the Global South

Uwe Hoering, July 16, 2023

On July 13, the German government presented the draft of its China strategy. Without going into the details of the vague formulations balanced between the various ministries, which are now being repeated in an endless loop by the media and politicians, here are just a few spontaneous comments.

There is a hint of the fundamental dilemma in a lead sentence of the paper with the cover picture of a game of Go. It states: The Chinese strategy game Weiqi (围棋) – also known as Go in Europe – is “unlike chess, not about stalling the opponent, but about gaining advantageous positions and defending so-called “liberties””. This sentence nicely formulates the tension between economic and security interests, which can also be summed up by the proverb: ‘Wash me, but don’t get me wet’. Hanging over the two controversial concerns for German policy is the sword of Damocles of the hegemonic confrontation between China and the United States. And as in the U.S., there are hawks in this front line in Germany who prioritize ‘checkmating’ the adversary, even to the point of economic and military coercion, and the ‘doves’ who want to continue to reap the benefits of cooperation and not slaughter the goose that lays the golden eggs.

De-risking instead of de-coupling

The ideal mediating formula for the dilemma seems to be the semantics of a distinction between ‘de-risking’ and ‘de-coupling’ that German and European policy-makers are so proud of, although the gray areas in between are of course considerable. The ‘risks’ are, on the one hand, the economic dependence on China, which is just becoming apparent again in the case of gallium and germanium. But the risks are also the openings for Chinese ‘Trojan horses,’ companies that could cripple critical infrastructure or collect confidential data.

In both cases, however, the implications for the German economy of any strategy, however labeled, are far-reaching. And the way capitalist companies are constituted, they see any government intervention in their business strategy – or in the ‘free market economy’ – as an opportunity to sell their cooperation. The managing director of the Federation of German Industries (BDI) has already sent out signals to this effect, demanding that ‘Germany as a business location’ be made more attractive again. Politicians are thus subjecting themselves to the demands of the business community. And in the end, as usual, it will be the taxpayer who pays for ‘risk reduction’ and ‘securing the location’.

“Alternatives” to China

More critical to whether the strategy will work at all is a different question, which covers just about three pages in the paper: The “active cultivation of German foreign and foreign economic relations is an essential component of this strategy.” This involves “global partnerships,” which also include countries that do not necessarily share ‘our values,’ but at least want to “defend a rules-based international order,” as Foreign Minister Baerbock declared. As is well known, this also includes Vietnam or Saudi Arabia and Qatar.

Note: In an article for the NZZ, Boas Lieberherr from the Center for
Security Studies
at ETH Zurich argues that there is “little international agreement” on these ‘rules’. Many countries of the Global South are opposed to an order determined by Western industrialized countries due to painful experiences, and see an opportunity to achieve a new, more equal order, e.g. by reforming multilateral institutions.

The real Achilles’ heel of the strategy lies in the relationship with the states of the Global South, since the resource providers for a ‘green capitalism’ are in a comfortable position to take advantage of the competition of Western capitalist countries and Chinese state capitalism. The idea now is to offer them ‘alternatives’ to their affiliation with China.

Note: The issues of climate protection and an energy turnaround became only peripheral
compared to the fierce competition for production chains, market shares and
preconditions for the next growth phase of capitalism. Whether the climate and other environmental areas will benefit is of secondary importance and also questionable.

“China has an advantage especially where we don’t offer enough to our partners, don’t have enough presence, or don’t promote our offerings enough.”

However, the insightful statement in the strategy paper that “we offer our partners too little, have too little presence and do not sufficiently advertise our offerings” is again only followed by hollow phrases. To make up for the competitive gap with corporations from other countries, especially China, existing packages such as Europe’s Global Gateway or the G7 Partnership for Infrastructure and Investment (PGII) are not enough. These initiatives, which promise billions for the countries of the Global South, depend on motivating primarily private Western companies to invest in mining and processing industries – and they are willing to take these economic risks only for a price. Again, this would cost the taxpayer a lot of money, if these funds can be mobilized at all in view of other budgetary burdens in the industrialized countries.

Note: In comparison, the financial costs of a “temporary military presence” in the Asia-Pacific region, such as the adventure trip of the frigate Bayern in the summer of 2021, by which “Germany underlines its commitment to the preservation of the rule-based international order,” are peanuts, while the danger of being drawn into the conflict militarily as well is much bigger.

China and other Asian countries have been masters of the game of Go for centuries. Therefore, the choice of the cover and the motto for the ‘China strategy’ is either a bold challenge that is not yet matched by the paper itself. Or it is the hidden acknowledgement that the decisive stones have been set already.

Translated with (free version)

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