MERICS Forum: The Next German Government's China Policy

“As China changes, the way that we deal with China must change, too.” This was Olaf Scholz’s message in 2022 marking a departure from former Chancellor Angela Merkel’s China policy, which consistently failed to adjust to changes in Xi’s China. However, Scholz’s adjustments to China policy have not kept pace with the real existing challenges China presents.

To the SPD-Green-FDP coalition’s credit, the first ever German ​“China Strategy” sets out quite an ambitious China policy. However, it was always clear that the ​“China Strategy” was little more than a PDF. The real China strategy is (as the French philosopher Ernest Renan once said about the nation) a plébiscite de tous le jours – the daily plebiscite of decisions on China policy. Under this coalition government, this vote was at times realistic (allowing a German frigate to sail through the Taiwan Strait), at other times disastrously short-sighted (as with the German campaign against EV countervailing duties). The next coalition must consistently be realistic and ambitious. Five principles should guide the chancellor and the coalition partners:

First, a clear rejection of the siren calls for getting closer to Beijing as a response to Donald Trump’s unpredictability.

Second, Germany must work with partners to reduce its dependencies on China far more comprehensively and decisively.

Third, it is in Germany’s core interest in terms of peace policy to take a clear stand against China’s support for the Kremlin’s war machine and to make Beijing pay a high price for this. In the case of critical technologies, Germany must ensure to stop enabling China’s military modernization. To ensure as effective a deterrence as possible, Beijing needs to have no doubts whatsoever about the severity of Germany’s and Europe’s response to aggression against Taiwan or other Indo-Pacific states.

Fourth, Germany must abandon outdated beliefs and take far more decisive action against the impending ​“China Shock 2.0,” which fundamentally threatens the core of Germany’s industrial base. ​“Within the WTO where we can. Beyond the WTO where we must” must be the guiding principle.

Fifth, Germany must invest more in ensuring that Europe is as united as possible in its dealings with Beijing.

All this does not come for free. Germany must be prepared to bear the costs. The bill for inaction will be far higher later on. We experienced this in a painful way with Russia.

This contribution was originally published as an online piece by the Mercator Institute for China Studies (MERICS) on January 21, 2025.