Business response will define Germany’s China strategy

Significance

The strategy is an attempt to define a more coherent approach towards China, taking into account changes in China’s foreign and domestic policies. While being strongly critical of China’s policies on a range of issues and noting that China is increasingly becoming a “systemic rival”, the strategy emphasises the need to gradually “de-risk” relations, while continuing to engage with China.

Impacts

• The strategy reduces incentives for German companies to invest in China.
• Scholz's government is unlikely to support the screening of outbound investment.
• Other EU countries may take the German strategy as a model to rebalance their relations.