Germany has announced that it will reduce its dependence on China in “critical sectors” including medicine, lithium batteries used in electric vehicles and key components for chip production.
The government has released its first “China Strategy,” a 40-page document outlining the path Berlin must take in managing its dependence on the world’s second-largest economy amid growing criticism of Beijing on human rights and its stance on international law.
China is Germany’s most important trading partner, with imports and exports between the two countries expected to reach nearly 300 billion euros ($335 billion) in 2022, according to a German government statement.
The document, which was approved by the government after months of delay and debate within Chancellor Olaf Scholter’s tripartite coalition, says China has changed and as a result of that and Chinese policy decisions, we need to change our approach to China.
She explained that China is an essential partner in the fight against climate change, epidemics and sustainable development. However, it is “more resolutely pursuing its own interests and trying in various ways to change the rules-based international order”, with implications for global security.
The paper highlights that Europe’s largest economy wants to maintain trade and investment ties with China while reducing dependence in vital sectors by diversifying its supply chains – a goal referred to as “risk reduction.”
According to CNN, Schulter tweeted, “Our goal is not to break away from Beijing…but we want to reduce critical future dependencies.”
The document says Germany is overly dependent on China for medical technology and medicines, including antibiotics, as well as information technology and products needed to produce semiconductors, as well as various metals and rare earths needed for power transmission.
“In key areas, the EU should not rely on technology from non-EU countries that do not share our core values,” she said.
He reaffirmed the government’s commitment to adjusting export control lists to reflect new technological developments, including in cybersecurity and surveillance technologies. The document says the government will also ensure that research and development projects with China “in which knowledge is likely to be depleted” are not supported by federal funds or only under certain circumstances.
China is the main market for many German companies, including Volkswagen and BMW. The government said it plans to hold talks with companies “particularly exposed to Chinese influence” to “identify risks.”
