Germany

This year’s dramatic geopolitical changes have significantly altered the calculus for foreign investment in China as large European enterprises are increasingly taking the lead and Japanese businesses are retreating in manufacturing and advancing in services. American companies, on the other hand, are frozen as the US government imposes tough sanctions on China’s tech sector and as manufacturers weigh strategic moves back to the US.

Analysing German Chancellor Olaf Scholz’s recent visit to China, former journalist Goh Choon Kang offers the view that Germany — along with much of Europe — has been “weaponised” by the US for its own aims, whether in terms of China policy or the war in Ukraine. This is a clear lesson for other countries, those in Southeast Asia included.

Thorsten Benner of the Global Public Policy Institute (GPPi) in Berlin points out that unlike former Chancellor Merkel, current German Chancellor Olaf Scholz has invested a lot of time into building closer connections with Asian partners. This fits in with his worldview of multiple emerging global powers, and the need to foster resilience, diversification and “de-risking” in achieving economic security vis-a-vis China.

Diplomatic activities appear to be back at full swing after the 20th Party Congress. Zaobao correspondent Yang Danxu notes that the visits by heads of states to China are driven by Beijing’s objectives of bringing its neighbours close, stabilising relations with Europe, and strengthening relations with developing countries. Will this help improve China’s relations and international image, especially amid the tense geopolitical background?

China’s American and European partners do not seem keen on granting China a “stable external environment” during the 20th Party Congress. With diplomatic sparring ratcheting up, Xi’s new team will have its work cut out when the congress ends in a few days’ time.

Economics professor Zhu Ying notes that even though Germany is economically dependent on China, its stand is changing due to the war in Ukraine, with China being seen as supportive of Russia’s invasion that goes against shared universal values. All in all, Germany’s increasing focus on values rather than economic interests is having a spillover effect on China.

Before World War II, an unlikely alliance and friendship sprang up between China and Germany. As diplomatic ties warmed, Germany provided China with arms and equipment against the Japanese invasion. However, because China and the Soviet Union were military allies, Hitler drew closer to Japan, resulting in the subsequent deterioration of China-Germany relations, and the division of camps in WWII.

Despite a record number of graduates entering the job market this year, China is seeing a shortage of skilled tradesmen, especially for the manufacturing industry. Chinese economics professor Li Jingkui believes that the main reason for the talent demand gap is China’s education system, which is driven by remnants of the backward ideology of the ancient feudal society.

After 16 years in office, Angela Merkel handed over the German chancellery to Olaf Scholz in December. How should we evaluate her legacy regarding China and, with the new German government almost two months in, what can be said about the future of Germany’s China policy?