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Germany’s economy ministry recommends excluding components from authoritarian state providers in critical infrastructure and introducing stricter requirements for firms doing business with China in a strategy document seen by Reuters.
Those German firms with particular exposure to China should share details of that business with the government and undergo regular stress tests, according to the ministry’s “Internal Guidelines for China,” which are classified as confidential.
Media previously reported some measures the economy ministry was considering to curb Germany’s reliance on China as the new government refines its relationship with the rising Asian superpower.
China became Germany’s main trading partner in 2016.
The document, which totals 104 pages and is dated November 24, appears to detail the latest view and is likely to feed into a broader Chinese government strategy it intends to release next year.
Berlin should consider screening outbound German investments in Chinese companies if they operate in security-relevant sectors or are suspected of violating human rights, it said.
German development funding for China is set to end by next year, and the political support of senior officials for projects there has been called into question.
Germany did not aim to break away from its biggest trading partner, China, the newspaper writes, as first reported by online portal The Pioneer. But Russia’s invasion of Ukraine demonstrated the high risks of close economic relations with autocratic states seeking an alternative world order.
“China’s importance as an export market for many German industrial sectors, as well as critical dependencies in certain … areas, could make Germany vulnerable to blackmail and limit its political capacity to act,” the paper said.
German companies should receive more help to diversify their trade, for example, through government export credits for other markets, the paper said.
The European Union should also consider excluding companies from third countries from tenders for particularly important projects such as the semiconductor sector, it added.
China’s development is described in the paper as very problematic and still in the direction of systemic rivalry, far from a partner. This was “proved not only by China’s pro-Russian attitude towards the attack on Ukraine”.
The paper highlighted the fact that 2027 has been repeatedly mentioned as the year China could invade Taiwan.
The Ministry of Economy is headed by Robert Habeck from the Greens, who have long been warning about the risks of excessive reliance on China. The document has yet to be approved by other parties in the coalition, including Chancellor Olaf Scholz’s Social Democrats.
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