- Germany is developing a new trade policy to reduce its dependence on China, according to Reuters.
- “We cannot afford to be blackmailed,” said German Economy Minister Robert Habeck.
Germany is reportedly working on a new trade policy to reduce its dependence on raw materials and components from China.
Berlin will not refrain from criticizing China’s human rights abuses or allow its protectionist policies to tip competition, Economy Minister Robert Habeck said in an interview with Reuters.
“We can’t afford to blackmail,” he said.
Europe’s leading economy must look to new trading partners and regions as key sectors depend heavily on China, Habeck added.
“Whether [the Chinese market] was to close, which is not likely at this time…we would have extreme sales issues,” he said, noting that “there is no more naivety.”
China is Germany’s biggest trading partner, with global trade volume climbing to 245 billion euros last year. A trade war between the two would be catastrophic and cost Germany six times more than Brexit if it turned completely away from Chinese trade, according to a recent study by the Ifo Institute.
German leaders have been planning to reduce their dependence on China for years, but started to put the wheels in motion earlier this month by drawing up a new policy, Reuters initially reported, citing a person close to them. folder.
Habeck confirmed that the ministry was considering policy changes to protect competition in Germany, such as auditing certain Chinese investments and infrastructure projects in Europe. Germany would also be more selective in its investments in China.
A source previously told Reuters that Germany was also considering reporting China to the World Trade Organization for unfair trade practices, which Habeck did not comment on.
China has also stepped up its activities with Russia since Moscow invaded Ukraine, while Germany and other European countries seek to reduce their reliance on energy trade with Russia.