No blind following: Secret to China-Germany relations

Editor's note: From April 14 to 16, German Chancellor paid his second visit to China since becoming chancellor. As tremendous changes taking place in the international community, how could China and Germany chart a path forward? What's the driving force of this relationship? Take a look at this episode of Reality Check.

"Little Germany." That's the nickname for Taicang, a county-level city in China's Jiangsu Province, around 50km away from the major international city of Shanghai. The city is a central hub for German businesses. From the early 1990s to now, the city has become home to 500 German businesses. German activities, food and culture are integral parts of the local life.

That's perhaps representative of what most people think of China-Germany relations – economics, business, trade. And they are indeed important. According to the German Federal Statistical Office, China was "Germany's most important trading partner in 2023 for the eighth consecutive year." The German Economic Institute's research shows that, in 2023, German direct investments in China grew by more than 4 percent to a record 11.9 billion euros ($12.8 billion). Within the last three years, German companies invested as much in China as they did from 2015 to 2020. German Chamber of Commerce in China's report shows that 78 percent of German companies in China expect growth to be consistent in the country in the next five years. 54 percent of these companies plan to increase investments in China.

When German Chancellor Olaf Scholz came to China in 2022, representatives from 12 major German business came with him. His most recent trip to China was accompanied by representatives from industry heavyweights like Siemens, Bayer, BMW and Mercedes Benz. Three cabinet ministers went on the trip as well. Together with Scholz, they represented all three coalition government partners.

But a close economic relationship isn't unique. As the world's second largest economy, China has pretty tight economic relations with nearly all of the Western world. What stands out in China-Germany relations is a rare and consistent quality: Economic mutual-understanding coupled with political pragmatism. Germany has not been a blind follower of Europe or the West's policy on China. Under Angela Merkel, Germany resisted the pressure to impose a full ban on Huawei, against the wishes of the United States. Scholz is following a similar pattern. Despite heavy criticism by the West, he was the first EU leader to visit China after the 20th Party Congress in 2022. It made him the first Western leader to visit China since the start of the COVID-19 pandemic.

By the way, Scholz opened a TikTok account only days before coming to China this time.

And as the West looks to restrict China's clean tech exports, Germany, again, expressed its own views. European Commission President Ursula von der Leyen said that "global markets are now flooded with cheaper Chinese electric cars" and that "the Commission is launching an anti-subsidy investigation into electric vehicles coming from China."

It's not like that Germany doesn't have a stake in this. The automotive industry accounts for around 5 percent of Germany's GDP and 17 percent of German exports. If anyone has a "good" reason to play the protectionist card, it would be Germany. But that wasn't the case. Chancellor Scholz responded to the EU's decision by saying that "we want to sell our cars…But this means that we are open to get the cars of other countries also on the market of Germany." "We are not working protectionists," he said.

Hans-Peter Friedrich, former Vice President of Bundestag, said in an interview that "we have important cooperation in the area of carbon dioxide (CO2) reduction and climate protection. I think Germany and China complement each other very well. I think tourism would be a good sector. The topic of circular economy is one that is becoming increasingly important in China. This is a central issue in Germany. So, there are many, many areas where we can work together, where Germany and China complement each other. I am optimistic that this will continue."

Simply put, Germany has its own plan on its China policy and it sticks to it. That doesn't mean that it wouldn't get swayed by the West. It doesn't mean there's no differences within Germany itself. Even within Scholz's own coalition, the Green Party and the Free Democratic Party (FDP) have known to be more hawkish and hardline towards China. His Foreign Minister, a Green, described China as posing a challenge to the "fundamentals of how we live together in this world." The FDP even once removed the one-China policy from its campaign platform.

But over the past few decades, we've seen German leaders ultimately taking independent and pragmatic approaches to China, seeking cooperation. And that persistence is what ultimately make the China-Germany relations work.

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