The controversial sale of part of Germany’s Hamburg port to China has brought an uncomfortable truth to the table for Germany: its commercial and technological dependence on Beijing and its prioritization of short-term economic interests. At a time when the European Union is trying to find a common voice in the face of the Chinese challenge, Berlin is once again going it alone. Chancellor Olaf Scholz, who is traveling to China next week to meet Xi Jinping, like his predecessor Angela Merkel, puts the German economy first and is opposed to Brussels on foreign policy. The energy crisis from Russia’s invasion of Ukraine is fueling fears of history repeating itself, only now, instead of cheap gas from Russia, trade ties with China are the weak link.
Is Germany naive? Interested? First of all, Berlin is increasingly alone in the European Union, where it is accused of being an obstacle, a brake on European foreign policy. Scholz insists that he wants to maintain strong trade ties with Beijing and that nobody is calling for a decoupling from China. Criticism of his decisions, both inside and outside the country, seems to point to the contrary. More and more voices are warning that Berlin will stumble over the same stone twice. Even Federal President Frank-Walter Steinmeier, who publicly lamented his own pro-Russian policy months ago as Foreign Minister, shook Scholz up. “The lesson we should learn is that unilateral dependencies must be reduced as much as possible; this is especially true for China,” he said on his first trip to Ukraine this week.
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“Germany used to believe that close economic ties guaranteed peace and stability, but we learned the hard way that that was just wishful thinking,” said Daniela Schwarzer, executive director for Europe and Eurasia at the Open Society Foundations. The war in Ukraine was a reality check for Berlin, which has seen how the shortage of cheap Russian gas that once cemented its industry’s competitiveness now threatens crisis and recession. It needed this jolt, says Schwarzer, to make it clear that Germany cannot afford to be dependent on a single player in the future, be it Russia for its energy or China for trade and technology. The heated argument about Chinese investments in the port of Hamburg “shows that many Germans have understood that. Before the Ukraine war, this debate would not have taken place,” he adds. Scholz memes are circulating on social networks these days, labeled as the famous Mao portrait and with humorous comments on his China policy.
Neither does the public controversy; nor the warnings of the European Commission, which issued a statement against the transaction in the spring; Not even the resistance of the green-liberal Scholz government partners has stopped the sale of a stake in the container terminal in the port of Hamburg to the Chinese shipping giant Cosco. In order to reach an agreement in the Council of Ministers, the chancellor, the main supporter of the operation, agreed to lower the percentage from the original 35% to 24.9%, which government spokesmen said will prevent the shipping company from participating in strategic decisions.
However, the deal poses risks for Germany’s security and economic interests, experts say. Jacob Gunter, senior analyst at the Mercator Institute for China Studies (MERICS), explains that Cosco is not your typical multinational simply looking for a return on investment. It is one of 97 state-owned enterprises directly controlled by China’s State Council, which act as “vehicles available to Beijing to advance the Communist Party’s strategic goals.” The security risks are not immediate, but long-term. The more Berlin relies on investments and deals with Cosco and other Chinese companies, the more influence Beijing will be able to exert on German China policy. “We can already see that German companies with a strong presence there are putting pressure on Berlin to soften its rhetoric,” he says.
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Scholz’s trip to Beijing next week has raised concerns among his European partners. A European External Action Service document recommends member states to “prevent and contain” Chinese attempts to use divide-and-conquer tactics and refrain from isolated initiatives. It is not easy for the Greens either to reconcile this trade visit with their value-oriented foreign policy.
The foreign minister, who will not sleep on Chinese soil due to the restrictions the country continues to maintain due to the coronavirus, will meet with Xi Jinping on the 4th in a hybrid formula of diplomatic and official travel that Angela Merkel has cultivated extensively during her tenure. The former foreign minister made 12 official visits to China amid businessmen. In 2016, China became Berlin’s largest trading partner and holds this position to this day.
In Brussels, there is also reluctance that Scholz wants to travel alone. There was even talk of a joint visit with French President Emmanuel Macron, but the relationship between the two leaders is not at its best. Germany and China are also planning a round of intergovernmental consultations next January. Scholz’s visit is the first by an EU leader in more than three years and coincides with the 50th anniversary of diplomatic relations between the two countries. It is also the first by a foreign dignitary since the Chinese president was re-elected to an unprecedented third term. The foreign minister’s spokesman said this week that a visit to Xi after he took office last December was “absolutely necessary and right”. There will be further “regular contacts”, as can also be seen at the G-20 summit in Bali in mid-November.
“European partners fear that Germany will use Scholz’s visit to China to represent only German interests,” says Schwarzer. Berlin is already in the crosshairs of the 27 for a €200,000 million aid package for households and businesses, angering countries that cannot afford such spending. The solo visit to China reinforces the feeling that the Germans are once again only looking out for their own interests and that their policies are exclusively geared towards good foreign business. In order to counteract this impression, the chancellor should “coordinate with his partners in Europe before and after the visit,” adds the expert. “He needs to make sure he carries a unified European message to China, for example on China’s position on Russia and Taiwan independence.”
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