OLaf Scholz is to be received with military honors when he travels to Beijing on November 4th for a state visit. That alone is a sign of high esteem. But the hosts show him even greater respect with a completely different type of preferential treatment. It is so extraordinary in China that only a few have been able to enjoy it in the past three years: In order to be able to circumvent the strict Corona regulations, the Chancellor and his entourage are to be brought into a “bubble”. Only high ranks have access there.
The bubble model was used for the first time in February at the opening of the Winter Olympics. At that time, Vladimir Putin made use of it. Shortly before he invaded Ukraine, he announced a “borderless partnership” between the two countries alongside President Xi Jinping.
The fact that Scholz is the first Western head of government to travel to Beijing after three years of Chinese isolation says a lot about the relationship between Germany and China. But it is even more symbolic that another German was recently allowed to fly to China in a private jet and did not have to isolate himself: Martin Brudermüller, CEO of BASF. At the beginning of September, the chemical company opened a gigantic plant in southern China.
Han Zheng, a member of the seven-strong Standing Committee of the Communist Party’s Politburo, joined the celebration. This is the highest circle of power in China. This special attention is understandable. Just like Volkswagen, BMW and Daimler, BASF, with its ten billion euro investment, ultimately represents the growing dependence of German industry on China.
That’s fine with the Chinese. But the federal government actually wants to end this dependency because of the new aggressiveness in China’s foreign policy. How this is supposed to work is unclear. The People’s Republic is Germany’s most important trading partner, and BASF believes that two-thirds of its global growth will soon come from China.
A risky bet
However, the bet made by the Ludwigshafeners will only work as long as China does not behave like Russia – i.e. as long as Xi does not order an attack on Taiwan. It became clear in the summer that war could quickly break out off its coast when, after a visit to Taiwan, Xi had Nancy Pelosi, the “speaker” of the American House of Representatives, hold military maneuvers off the island for weeks.
Should Taiwan’s protecting power America urge its allies to impose sanctions on Beijing in the event of an attack, as is already happening in the case of Russia, this could trigger a famine in China. But not only that. China’s economy is 11 times the size of Russia’s, and some estimate it could shrink by a quarter in the wake of a war. For German corporations like BASF, that would have far more consequences than the Ukraine war.
The dependence of the German economy is not limited to the Chinese sales market. China has long been indispensable for Germany on the import side as well. The country supplies up to seventy percent of the rare earths and metals that German industry needs, as well as a number of essential primary products. A survey by the Ifo Institute recently showed that 46 percent of German companies depend on supplies from China. In other words: If China no longer supplies, every second production plant in German industry will come to a standstill. There is a detailed report on this in the business section of this issue.