The German government is divided on China policy

The visit of a German Bundestag delegation to Taiwan has led to strong Chinese reactions. While Chancellor Olaf Scholz does not want to upset China’s leadership, his ministers are opting for confrontation.

The German MPs Klaus-Peter Willsch (left) and Katrin Budde (right) want to lean more towards Taiwan. However, the chancellor is pursuing a pro-China agenda.

Fabian Hamacher / Reuters

At least since Nancy Pelosi’s flight, visits by Western parliamentarians to Taiwan have been under particular scrutiny. The Chair of the US House of Representatives paid a visit to the island nation in early August. China responded with threats and multi-day military maneuvers in the Taiwan Strait.

A similar escalation did not occur during a trip by a German Bundestag delegation. Parliamentarians from all six parliamentary groups represented in the Bundestag spent almost a week in Taiwan before returning to Germany on Thursday. It was not the first trip of the so-called Parliamentary Friends of Berlin – Taipei. The last visit took place in 2019.

China’s leadership reacted angrily nonetheless. A spokesman for the Chinese Ministry of Foreign Affairs reminded MPs shortly after their arrival last Sunday not to send false signals to the People’s Republic. The chairman of the parliamentary circle of friends, Klaus-Peter Willsch (CDU), called China’s reaction completely inappropriate on Thursday in Taipei. This was much more drastic than in the past.

Chancellor Olaf Scholz is aware of these reactions and therefore avoids confrontation with Beijing. While his ministers from the coalition partners Greens and FDP are conspicuously critical of China, the chancellor remains silent. There are many unspoken indications in the Chancellery that Angela Merkel’s pro-China agenda will continue. But the Ukraine war could also cause a gradual change of course in German China and Taiwan policy.

Germany: China’s friend in Europe

Angela Merkel was enthusiastic about China. During her sixteen years in office, the former Chancellor traveled to China thirteen times. She visited no other country as often as China. Merkel even celebrated her 56th birthday in 2010 with her husband in the Chinese provincial capital Xi’an.

In addition to birthday celebrations, the Chancellor’s trips to China were always about one thing: money. Hardly one European country is economically as closely intertwined with China as Germany. Beijing has been Berlin’s most important trading partner for years. The automotive industry in particular is dependent on Chinese demand: every second VW is sold in China.

So far, there is no trend reversal in sight: In August, the German Economic Institute published a study on Germany’s economic dependence on China. Title of the paper: “Full steam in the wrong direction”. In the first half of 2022, German companies invested a record 10 billion euros in the People’s Republic, and the value of imports from China increased by almost half compared to the first half of 2021.

This is not without implications for politics. Merkel avoided any open criticism of the Communist Party. Taiwan was certainly never an issue for them. One looks in vain for a sentence about the democratic island republic in the coalition agreement of Merkel’s last government.

At the beginning of the Merkel era, Germany’s China policy was still successful, says Bernhard Bartsch from the Berlin think tank Mercator Institute for China Studies. The success of German companies in China is also due to the good relationships that Merkel has established. “But Merkel failed to react properly to the increasingly authoritarian change in China and to focus on greater economic diversification. There is a high potential for blackmail in Germany’s dependence on China,” says Bartsch. “Merkel has never uttered the word rival, which the EU has been using in relation to China since 2019.”

China-critical minister, China-friendly chancellor

The traffic light government wanted to end its cosiness towards Beijing and position itself more closely alongside Taiwan. The current coalition agreement identifies China as a systemic rival, and the coalition partners stress that any change in the status quo in the Taiwan Strait must be consensual and peaceful. The planned investment agreement between China and the EU – largely promoted by Merkel – must not be ratified.

But the chancellor apparently doesn’t want to know anything about the agreements. In a first phone call with Xi in December, Scholz said, contrary to what was said in the coalition agreement, that he hoped that the investment agreement would be concluded soon.

A clear pattern emerges in the traffic light coalition in relation to China. While the Greens and FDP are rhetorically arming themselves against China, the Chancellery is blocking any significant change of course. The Green Economics Minister Robert Habeck and the Liberal Research Minister Bettina Stark-Watzinger recently called for an end to naivety in German-Chinese relations. Foreign Minister Annalena Baerbock warned China against attacking Taiwan in a vaguely worded manner with a view to the Ukraine war. Scholz, on the other hand, is silent and slows down his ministers behind the scenes.

One example is the planned minority stake by the Chinese shipping company Cosco in a terminal in the Port of Hamburg. Habeck is critical of the investment and tends to prevent the deal. However, the Chancellery called the Economics Minister back and supports the Chinese entry, reports China expert Noah Barkin from the German Marshall Fund.

Bernhard Bartsch confirms this impression: “The new German China strategy is currently being promoted primarily by the Federal Foreign Office and the Ministry of Economics and Research. But especially in the Chancellery there is a strong desire for continuity and stable relations with Beijing.”

China policy was already considered Chancellor policy under Merkel. That doesn’t seem to have changed under Scholz.

Does the “turning point” also apply to Beijing?

In view of the Ukraine war and the “turning point” in German-Russian relations, the question arises as to whether the same applies to China. In Taipei, SPD MP Katrin Budde took the same line: “Since Russia’s attack on Ukraine, one question has been buzzing around in everyone’s mind: Can something like this happen again somewhere else in the world?”

The Russian war of aggression intensified the discussions about the future of Sino-German relations, says Bernhard Bartsch. “Not much has changed in substance, but the Chancellor is driven domestically by the impulses from his own houses.”

According to Bartsch, the traffic light government has already corrected a mistake in Merkel’s China policy. For the first time ever there is a discussion about China that consistently combines economic and political factors: “In German politics, there has never been so much and so intense a debate about China. But this must now result in a coherent strategy.” In other words, Germany has recognized the danger in relations with China, but has not yet averted it.

Bartsch is confident that Beijing’s political backing for Moscow could also lead to a rethink in Germany, albeit slowly. “With regard to Taiwan, there is a great willingness in the federal government to exploit the leeway that exists without fundamentally endangering the relationship with China.”

In concrete terms, for example, a visit by members of the executive branch to Taipei in the near future would be conceivable and probable, for example at state secretary level. According to statements by members of the Bundestag delegation, these visits have taken place in the past. According to Bartsch, China would protest even more and Germany would prick a few needles, but the risk is manageable.

Germany’s allies realize that something is in motion, but that the chancellor still needs a nudge. At the end of September, the US ambassador to Germany, Emily Haber, announced on Twitter that she had met with US lawmakers and other ambassadors to formulate a unified Taiwan policy. That the meeting was made public is no coincidence. Neither does the fact that it took place in Berlin of all places.

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The Indo-Pacific is an arena of strategic competition between the US and China. India comes into play as the third player. Beijing’s maritime Silk Road project is causing tension.
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