Opinion | Germany's pragmatism a step towards strategic autonomy

OLAF SCHOLZ’S Germany is now trying to prove that it will no longer be a lackey of the United States.

“I want to make the European Union independent, sovereign, strong,” Scholz said last year when he made the first statement about plans as German chancellor. This was a daring statement given that the EU had long been regarded as a protégé of the United States.

German Chancellor Olaf Scholz. File photo

Last week, Scholz’s Cabinet approved Chinese shipping giant COSCO’s acquisition of a 24.9% stake in a terminal of the Hamburg port, Germany’s largest port, despite fierce opposition from within the governing coalition. The approval of the acquisition also signals that Germany is not kowtowing to Washington that has been demanding allies to follow its decoupling moves.

Meanwhile, the German Government plans to approve the sale of a local chip factory to a Chinese-owned company, reports said Thursday, despite reported concerns from intelligence agencies. Business daily Handelsblatt said the approval of a takeover of Dortmund’s Elmos by Sweden’s Silex, a unit of Chinese company Sai MicroElectronics, is expected in the coming weeks.

Although an approval remains uncertain, the development shows Scholz’s government is resisting U.S. pressure for its allies to decouple from China.

The Biden administration earlier this month moved to cut off China’s supply of microchips, issuing two new rules limiting U.S. companies from exporting chips and chipmaking equipment to China while also pushing allies to do the same.

Under the hegemonic rules, foreign makers of chipmaking equipment could be put on the U.S. corporate blacklist — called the entity list — if their home governments demonstrate “sustained lack of cooperation” with U.S. trade policy. The condescending U.S. simply wants its allies to sacrifice their interests to protect its status as the world’s only superpower.

Scholz understands where his country’s interests lie. Eager to expand trade with China, he will visit China on Friday, becoming the first EU leader to make the trip since November 2019.

As was common under his predecessor Angela Merkel, Scholz is bringing a delegation of German industrialists to China, Germany’s largest trading partner. The bilateral trade reached 245.4 billion euros (US$244.5 billion) in 2021, surging 15.1% year on year and marking the sixth consecutive year for China to be the largest trading partner of Germany.

While Berlin’s governing coalition is deeply divided on how to deal with China, Scholz has made it clear that he wants to continue the important trade relationship. This also shows he has inherited pragmatism from Merkel, who maintained friendly Sino-German relationship throughout her premiership. Merkel always refused to be drawn into the Sino-U.S. discord and insisted that Germany did not perceive China as an enemy.

Scholz has shown he has backbone by refusing to dance to the tune of the U.S., and his pragmatism is justified from the merits of globalization. “Globalization has been a success story that enabled prosperity for many people. We must defend it,” Scholz told an engineering conference in Berlin on Oct. 11. “Decoupling is the wrong answer. We don’t have to decouple from some countries,” he said. “I say emphatically we must continue to do business with China.”

The view was echoed by EU trade commissioner Valdis Dombrovskis, who told the Oct. 11 conference in Berlin that decoupling from China is not an option for companies in the EU. In fact, foreign direct investment into the Chinese mainland, in actual use, expanded 18.9% year-on-year to US$155.3 billion in the first nine months of the year, the Ministry of Commerce said Thursday.

After inaugurating its first plant at the Zhanjiang Verbund site in Guangdong Province in September, German chemical giant BASF announced earlier this month that it will invest in a new Neopentyl Glycol (NPG) plant at the Zhanjiang site. The business delegation coming to Beijing with Scholz later this week will demonstrate they know decoupling is not in the interests of businesses.

The Iraq, Afghanistan and Ukraine wars should serve as a wake-up call for Germany, and EU at large, to achieve “strategic autonomy.”

In early September, Scholz again called for a “stronger, more sovereign, geopolitical European Union.” Noting that Washington’s focus has shifted to competition with China in the Indo-Pacific, he concluded that “Europe is our future.” The U.S. is ganging up blocs and cliques to safeguard its hegemony, but this is not the ambition of the EU.

With 447 million people, a combined GDP of US$18 trillion, and more than US$200 billion in defense spending by its member countries, the EU should stand on its own feet.

Editor/Li Dan

WeChat Editor/Claudia