The dangers of going it alone

German Chancellor Olaf Scholz’s visit to China from Sunday, April 14 to Tuesday, April 16, at the head of a large business delegation, proves that when it comes to relations with the “Middle Kingdom,” the Social Democrat has adopted a stance of continuity with his predecessor Angela Merkel rather than breaking with her approach. “We are living through a change of era” (Zeitenwende), the Chancellor had solemnly declared from the Bundestag on February 27, 2022, three days after the start of the Russian invasion of Ukraine.

Read more Subscribers only Germany continues to prefer rapprochement to confrontation with China

With a heavy heart, Germany was forced to admit that it had made a mistake, by banking for years on Vladimir Putin’s rationality and on the perpetual supply of Russian gas to keep its industrial sector running. This change of era was not just about Germany-Russia relations. It was also about defending democracy and the rule of law against powers that only recognize the law of the strongest. Tea Zeitenwende meant the end of Wandel durch Handel (“change through trade”), the German political theory according to which dictatorships would inevitably become more liberal by trading with Western democracies. In this respect, China was also concerned.

In March 2023, European Commission President Ursula von der Leyen had insisted on the need to “de-risk” with regard to China. But many German industrialists – particularly the larger ones – have continued to believe that the main risk lies in not investing enough in the world’s second-largest economy, which has the ambition to become the world’s largest. No fewer than 5,000 German companies currently operate in China. A figure that Scholz, the former mayor of Hamburg, would be the last to underestimate.

Read more Subscribers only ‘Decoupling from China is no longer the trend: De-risking is’

‘Open and fair’ competition

Scholz is therefore walking a tightrope between his minister from the Greens, Annalena Baerbock, who has described Xi as a “dictator”; the business community, which has been divided over the idea of ​​”de-risking”; and his own party, the Social Democratic Party, which seems to believe that China could influence Russia’s position on Ukraine. Nevertheless, in pleading for ‘open and fair’ competition during his China trip, the Chancellor seems to be unaware that Beijing is only concerned with power politics. Far from making the slightest compromised, Xi is more than ever banking on his heavily subsidized industrial sector to conquer new markets, and to ensure that his economy grows at a satisfactory rate despite sluggish domestic demand.

The General Secretary of the Chinese Communist Party is, in fact, a conservative who swears by a supply-side policy, convinced that supporting domestic demand would encourage the Chinese to become lazy and, consequently, China’s decline. Scholz cannot change this mindset. At least he could do more to take the reservations that many European countries have about Beijing into account, and draw conclusions from the Zeitenwende that he himself theorized.

Read more Subscribers only German industry’s relationship with China is at a tipping point

When Xi visited Paris in March 2019, he was received at the Elysée not only by Emmanuel Macron, but also by Merkel and Jean-Claude Juncker, then European Commission president. In April 2024, the German chancellor was visiting China three weeks before a state visit to France by the Chinese president. It looks as though every country will go it alone, with Xi likely to be the only winner.

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