Economy & Politics

Column China causes growing fears in German companies

Capital columnist Bernd Ziesemer
Personal-Financial.com columnist Bernd ZiesemerMartin Kress

The long-planned EU-China summit in Leipzig does not take place for the time being, the date on September 14 is canceled. The corona pandemic ensures that such a meeting cannot take place. But the summit doesn’t fit politically into the times either. In the past, Europeans have been able to limit themselves to many non-binding niceties on such occasions – and have offered only a little cautious criticism. This is no longer possible. Too many problems strain relationships. Huawei and Hong Kong, China’s imperialist project of a “new silk road”, the growing threats from Beijing and the propagandistic fire in the corona crisis make it impossible to go on as before if Europe does not want to completely forget itself.

In addition, a summit of niceties two months before the US presidential election would also send the wrong signal for transatlantic relations. Because in the United States, displeasure about China’s behavior grows every week – across the two major parties. So it is good if the EU takes some time to think about a new strategy.

Not only is the Federal Government hanging in a strange balance with its previous China policy, the corporations also have to readjust their previous strategies. On the one hand, German companies need the Chinese market more than ever to get out of the corona crisis. On the other hand, concerns about the increasingly aggressive policies of Chinese leader Xi Jinping are growing. China is also increasingly vehemently demanding political good behavior from foreign companies – for example when it comes to Hong Kong. This is not compatible with the principles of free world trade.

China is not a second Soviet Union

In the United States, many politicians, including the Democratic Party, now consider a second cold war against China to be inevitable. But this analogy does not go any further. Against the economically weak Soviet Union, the West was able to pursue a strategy of political and economic containment after the Second World War until its fall in 1990. The technology boycott worked. Such an act against China would be stupid and ultimately doomed to fail. The country’s economic weight is far too high to speak for the withdrawal of Western companies.

What the West needs instead is a smart decoupling strategy. So far they don’t exist. At first, the first elements are emerging – for example, the renunciation of Chinese technologies in all high-risk areas (keyword Huawei) or the demand for strict equal treatment of all companies in China.

The German groups are already pursuing different strategic approaches in China. This trend is likely to intensify in the next few years. Some corporations, especially in the automotive industry, continue to rely on steady growth in China and consciously accept the associated dependency. Other companies – for example in the chip industry or in mechanical engineering – are only becoming increasingly cautious in China. In any case, what appears to be necessary is a deeper debate in the German economy on how to deal with a partner who ultimately does not bow to Western norms.


Bernd Ziesemer is a capital columnist. The business journalist was editor-in-chief of the Handelsblatt from 2002 to 2010. He was then Managing Director of the corporate publishing division of Hoffmann and Campe until 2014. Ziesemer’s column appears regularly on Personal-Financial.com. Here you can follow him on Twitter.


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