DGermany should only allow China what China also allows Germany: This is how Federal Economics Minister Robert Habeck (Greens) imagines the new German foreign trade policy. “China invests around the world, China buys its commodities around the world, but prohibits buying into its infrastructure. Why don’t we do it the same way?” he asked on Monday at the 17th Asia-Pacific Conference of German Business in Singapore. The sentence is also a dig at the decision by Chancellor Olaf Scholz (SPD) to allow the Chinese shipping company Cosco to enter an operating company at the Port of Hamburg.
Scholz spoke at the conference three hours after Habeck. He recently defended his visit to China. The joint reminder to Russia not to threaten the use of nuclear weapons was an important signal of this trip. China remains an important trading partner for Germany. “But it always takes two for a tango,” said Scholz. “The diversification is already in full swing.” This should not be confused with a “decoupling”, a decoupling from China. “Deglobalization is not an option for us,” emphasized Scholz.
Habeck had previously urged German companies to broaden their trading relationships. “China is aimed at the whole world, the European Union at China. We are not diversifying, we are even increasing our dependence on China,” he criticized in front of almost 600 managers, association heads and diplomats. Habeck also made it clear: “Diversification is not the same as decoupling. When it comes to diversification, I am looking for new partners.”
Great importance of the China business
A policy of decoupling is the major concern for most of the economy. This was also expressed by Roland Busch, the CEO of Siemens and current head of the Asia-Pacific Committee of German Business (APA). The China business is not only of great importance for his group, investments in countries in which one is already represented pay off more quickly, said Busch. But he also acknowledged that diversification also brings opportunities in the long run: “It’s hard to be in all countries. But diversification makes sense.” Busch left no doubt about the importance of China for the German economy: “A third of German investments in research and development now flow to China.”
In order to open up new avenues for companies, Habeck relies on bilateral trade agreements. “We should also look for a way to connect the EU and the ASEAN countries via free trade,” recommended the economy minister on Monday with a view to the ten Southeast Asian countries. So far, agreements have only existed with Singapore and Vietnam. While the European Union is still considering agreeing free trade at least with those countries in the region that are not military dictatorships, the EU partners Australia and New Zealand got down to business: in Cambodia’s Phnom Penh, Prime Minister Anthony Albanese and his counterpart from Wellington, Jacinda Ardern, the already existing free trade agreement between the two Pacific countries and Asean. The Asean-Australia-New Zealand Free Trade Area (AANZFTA) is about trade and sustainable development and education, among other things.
At the beginning of the economic conference, Habeck had sounded even more skeptical about an EU-Asean agreement. “Of course there are also countries in the region that are not suitable partners for making a value-based trade policy because of their political structure,” he said. The aim must be to promote as many bilateral trade agreements with countries from the region as possible.
Green light for Ceta
At least domestically, he has already made a step forward. A few days ago, the parliamentary groups of the traffic light coalition gave the green light for further free trade agreements in a joint paper. The agreement with Canada (Ceta), which the Greens have fought for a long time, is to be ratified by the Bundestag shortly, and the EU Commission’s negotiations with Chile and Mexico are also to be concluded quickly. There is even said to be a new edition of talks with the Americans, albeit no longer under the buzzword TTIP. These are new tones, especially for the Greens, which are traditionally critical of free trade. Habeck seemed correspondingly relieved on Monday. Germany had previously been “blocked” on trade issues, he said. That’s changing now.
In return for the new openness to free trade, the Greens had to get a concession. This is Germany’s exit from the Energy Charter, an investment protection agreement that allows companies to sue government decisions before arbitral tribunals. On this basis, for example, the German energy company RWE demanded compensation from the Netherlands for the decision to phase out coal. After nothing came of a reform of the Energy Charter at European level, Germany is now drawing the line.
Shortly before his return flight to Berlin, Habeck visited the local SAP branch in Singapore. Those responsible there made it clear to him once again how important good business relations with Asia are for German companies. 70 percent of all talent worldwide comes from the region, more than 300 “unicorns” – start-ups with a value in the billions – are there, calculated Paul Marriott Habeck, who is responsible for Asia-Pacific. The latter asked almost shyly whether Asians could learn something from Germany. You have a reputation for being a bit sleepy. This was followed by a eulogy from the SAP manager about German technology on the subject of environmental protection. “You can be quite confident about that.”
