German China strategy relies on EU as counterpole

"The German China strategy is a step forward compared to early drafts. The German government is concerned with a broad strategic perspective, but important issues are not addressed or are addressed in an unspecific manner.     

The strategy accommodates Brussels and German companies. It relies on the EU as a rule-maker, actor and countervailing power to China and builds up rhetorical pressure on German companies above all. Germany's own instruments, such as the bilateral investment protection agreement with China of 2003, remain unmentioned. The German government subordinates its own goals as the leading industrial location in the EU to the EU and its goals. Companies retain their freedom of choice and are to be encouraged by unspecified incentives to reduce their risks in relations with China and to reduce one-sided dependencies. The industry is to be burdened only to the extent necessary. Measures to identify dependencies on China, the role of industry in these issues, and more detailed quantitative analysis of dependencies are not included. 

The broad description of the state of relations with China in all fields of real and monetary foreign trade and the frequent use of the standard phrase "to work for goal X" also shows a lack of thinking in persepective. How the Chinese and German economies are likely to change in the coming years and what this might mean for a strategy by Germany to defend its industrial base remains hidden. Likewise, China's influence on global financial markets remains underexposed.  

China's expected export offensive in key sectors in Germany and worldwide and, above all, German weaknesses are hardly mentioned. If the focus is on the EU, the single market and its countervailing power, then the German government could have set concrete priorities such as the completion of the Capital Markets Union or the single market for services and named corresponding proposals. Here, the strategy is stuck halfway. 

Plans for concluding trade agreements with third countries, especially with the USA, also remain unspecified. While trade agreements are mentioned as an important instrument for diversification, even with regard to what the EU would have to offer in terms of market opening, the strategy only mentions goals and no concrete proposals for implementation.   

Conclusion: The description of the state of affairs refrains from settling accounts with China's policies and values. This is positive and does justice to the claim of a general strategy. It opens up fields of action for the EU and subordinates German interests to European interests. However, there is room for improvement in terms of instruments, as well as in the definition and prioritization of goals.”