German business leaders warn against pulling out of China

berlin — A group of top German business officials has warned it will not back down from China, conceding that it is right for Germany to redefine its relationship with Beijing.

The intervention by the eight chief executives comes as Germany grapples with its future trade and political ties with China, according to an article in the daily Frankfurter Allgemeine Zeitung on Thursday. The authors included the CEOs of industrial group Siemens, chemical manufacturer BASF, technology company Bosch, auto parts supplier Schaeffler and the Port of Hamburg.

They said that German companies’ sites in China and elsewhere in the world contribute significantly to their competitiveness, and that China is the world’s second largest and most dynamic market – “so our presence there is particularly important in the interests of German economic power.”

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The potential of the Chinese market offers an opportunity to scale up faster and be more successful in other markets while securing jobs in Germany, the authors argued.

They said that, given China’s increasingly assertive behavior and the human rights situation in Xinjiang province, “Germany today is right to define its relationship with China more finely in the three dimensions of competition, cooperation and systemic rivalry.” But, they added, “in the current public debate, we see an almost exclusive emphasis on systemic rivalry over words and concrete measures.”

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“Despite all the challenges facing China and China, we are confident that its fundamental growth will remain dynamic,” the authors wrote. “A withdrawal from China will cut us off from these opportunities.”

In recent weeks, Chinese investments in Germany have been concentrated as authorities seek to balance strong trade ties with Russia, which supplied more than half of Germany’s natural gas and now supplies none, to avoid repeating mistakes.

Last month, Chancellor Olaf Scholz’s ruling coalition argued over whether to allow Chinese shipping company Cosco to take a 35% stake in a container terminal at the port of Hamburg. The cabinet eventually allowed COSCO to take a stake of less than 25%, ensuring that it would not gain the ability to block the company’s decisions.

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On Wednesday, the cabinet blocked the sale of a chip factory in Germany to a Swedish subsidiary of a Chinese company and a second planned investment, which the government did not detail.

Meanwhile, Scholz visited Beijing last week.

Scholz is encouraging companies to diversify but not discouraging business with China. He said before his trip that “we don’t want decoupling from China” but “we will reduce unilateral dependence in the spirit of smart diversification.”

In Thursday’s article, the CEOs agreed that “we must diversify risks,” for example into chips, batteries and raw materials.

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