New Year, New Policy: Is Germany about to make a sharp U-turn in its attitude toward China? Three major associations issue warnings.

Since German Chancellor Olaf Scholz’s visit to China, Germany’s attitude toward China has undergone significant changes, and numerous cooperation projects have begun progressing steadily. But this positive momentum did not last long: recently, media outlets revealed a draft of the German Foreign Ministry’s new ‘China Strategy,’ suggesting that Germany’s China policy may undergo a dramatic shift in the coming year. Reportedly, this draft strategy demands that Germany’s China policy place greater emphasis on ‘human rights.’ Upon seeing the term ‘human rights,’ readers can likely anticipate what follows. Indeed, the draft then calls for restricting German corporate investment in China and reducing dependence on China. These proposals clearly run counter to Germany’s current overall China strategy; consequently, following the draft’s exposure, Germany’s business community immediately issued warnings: such an approach toward China is unacceptable. The Association of German Chambers of Industry and Commerce (DIHK), representing 79 chambers and over three million member companies across Germany, issued a stark warning to the German government: a fundamental shift in relations with China would negatively impact German employment. True, lessons from Russia demonstrate that overdependence is unwise—but this insight should not prompt a 180-degree reversal toward China. For Germany, China remains an exceptionally important economic region. In addition to DIHK, the Federation of German Industries (BDI)—representing over 30 industrial associations—and the German Federal Association of Wholesale Trade, Foreign Trade and Services (BGA) also warned the German government. Their core message was consistent: adjustments to China policy are permissible, but must be measured—absolutely no 180-degree U-turns, and certainly no ‘decoupling’ from China. Politicians must place greater trust in businesses; otherwise, Germany’s prosperity will inevitably suffer. Frankly speaking, these three associations—and the enterprises they represent—are best positioned to understand Germany’s economic reality. Impacted by the Russia-Ukraine conflict, Germany’s inflation is expected to persist for an extended period, and its economy faces recession. Under these circumstances, severing ties with China would be profoundly unwise.

Germany to unveil a new ‘China Strategy’ early next year; business sector warns against a ‘sharp U-turn’ in relations with China.

Siegfried Russwurm, President of the Federation of German Industries (BDI)—an umbrella organization comprising 36 industrial associations—told Deutsche Presse-Agentur (dpa): “The China Strategy must address three dimensions: China as a partner in tackling global challenges; China as a systemic competitor—and, crucially, China as the central market for German industry, now and in the future.” Dirk Jandura, President of the German Federal Association of Wholesale Trade, Foreign Trade and Services (BGA)—which represents Germany’s wholesale trade, foreign trade, and business-oriented service sectors—stated that China is a massive market. “That is why I hope for restraint.” German companies are already working intensively to diversify their supply chains—but this takes time. Regarding China, he described policymaking as ‘walking a tightrope.’ “Critically reassessing Europe’s relationship with China is appropriate. Yet I urge the federal government not to throw out the baby with the bathwater—not to overreact.” Otherwise, such measures would constitute the worst possible course of action for all affected enterprises. Jandura added: “Politicians must place greater trust in companies.” Global trade has lifted millions worldwide out of poverty. “If you adopt a black-and-white mindset, you’ll inevitably be forced to sever ties with certain countries—yet doing so would jeopardize prosperity both for us and for them. A more pragmatic approach is essential—one that never loses sight of our objectives.” Adrian, President of the Association of German Chambers of Industry and Commerce (DIHK), further noted that most German companies operating in China produce locally for the Chinese market—a fact frequently overlooked in current public discourse. “Of course, one key lesson drawn from recent crises is the need to spread business risks more evenly. Companies are actively pursuing this goal with great determination right now. Yet the idea of completely withdrawing from China is utterly unrealistic. We hope federal ministries will embrace greater pragmatism—and less ideology.” Adrian added: “We shouldn’t constantly try to explain the world to other countries, assuming every nation must adhere to our value system.”

Germany Industry Association Pushes for Tougher China Policy

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The German industry association BDI urged the government to reduce economic risks linked to China by diversifying supply chains and implementing trade defense measures against unfair competition.

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Germany Industry Association Pushes for Tougher China Policy

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