We are diversifying, Scholz says as German business warns against hurting China ties

By Victoria Waldersee and Riham Alkousaa

BERLIN -Germany won't repeat its errors with Russia in China and was already diversifying its commerce, Chancellor Olaf Scholz mentioned on Tuesday, as a significant industrial participant warned in opposition to damaging ties to the nation’s largest buying and selling accomplice.

“The error of dependence as with Russia won't occur once more,” he mentioned at an financial discussion board organised by Sueddeutsche Zeitung, referring to Germany’s decades-long reliance on Russian vitality provides.

His feedback got here after representatives of German trade reacted critically to a leaked draft of Berlin’s new China technique and known as for extra political assist in diversifying commerce and securing key uncooked supplies from elsewhere.

A big German enterprise with a powerful presence in China mentioned on Tuesday it agreed with the necessity for broader commerce ties however feared the tone of the technique would damage its relationship with Chinese language companions.

“The distrust in direction of China and market members like us is evident in each line of that textual content,” the enterprise consultant, who declined to be named due to the sensitivity of the matter, mentioned. “The framing is the issue.”

The draft international ministry doc advocates constructing stronger commerce relations with different economies together with extra controls on German commerce with China, together with ‘stress checks’ on uncooked materials dependency and screenings for environmental and human rights implications of German investments.

“Stress checks could be one other bureaucratic hurdle which solely we'd face, not our rivals from different nations. What’s the purpose?” the enterprise consultant mentioned. “After all we would like extra open commerce with China… however each world area has its issues.”

China’s international ministry warned Germany in an announcement on Tuesday that erecting protectionist limitations may destabilise provide chains, stating that “politicising regular financial commerce… is opposite to the ideas of market economic system.”

But the German draft doc factors to disadvantages confronted by European companies in China together with restricted market entry, necessary three way partnership guidelines, and compelled know-how switch.

In an interview with German enterprise each day Handelsblatt on Tuesday, Volkswagen’s China chief Ralf Brandstaetter mentioned the corporate was “not closing ourselves off to actuality and adjusting our technique… however that doesn't imply we can not make use of the market alternatives China provides.”