Understanding German ties to China
Dear Reader,
China is on everyone’s lips at the moment thanks to the deal for Chinese state logistics company Cosco to buy shares in a container terminal at Hamburg Harbour.
I’ve taken a closer look at how Germany deals with China on quite a few occasions in this newsletter.
Back in 2021, I explained China policy throughout the Merkel era. In this deep dive, I looked at how Merkel had prioritised ties with Beijing over all others in East Asia, leading to booming trade. For critics though, Merkel’s mercantalism also came with risks…
Read the article here (Paywall free)
The Greens have always been more hawkish than other mainstream parties on ties to Beijing. So, when Annalena Baerbock became Foreign Minister last year, Berlin was expected to get louder about Taiwan, the Uyghurs and Hong Kong. The Chinese were relaxed a year ago, believing that it could let “let the bullets fly for a while” before the Green party “extremists” lost influence and realists took back control
Well, the bullets certainly did fly. In an August newsletter I explained how Baerbock’s comments on Taiwan had led to fury among Chinese diplomats and soul searching in Berlin.
Read: ‘How to Deal with China?’
But maybe the Chinese were right all along.
Olaf Scholz has bludgeoned a deal for Cosco to buy shares in a terminal at the country’s most important sea port through cabinet, despite deep reservations on the part of the Greens. The Chancellor is seemingly desperate not to anger Beijing ahead of an official visit next month.
I looked at what the reaction has been.
Read: Scholz comes out for Beijing
Want to know why the leader of a country with a flailing economy is so keen to smooth out relations with China’s communist party? This article from 2021 might provide some answers.
An expert:
How did Daimler, in the midst of the COVID crisis, manage to grow its 2020 profits by an incredible 53 percent? Simple: a third of the Stuttgart group's cars are sold in China. What’s the trick behind Infineon’s 25 percent increase in operating profits last quarter? 40 percent of the semiconductor producer’s business is in China.
Regards,
Jörg Luyken