Germany wants to reduce its dependency on China, its most important trading partner, and that includes the materials it imports for semiconductor chips and electric vehicle batteries.
Calling China “simultaneously a partner, competitor and systemic rival”, German Chancellor Olaf Scholz has released a fairly high-level strategy document that asserts its values and outlines how it will protect its interests.
Germany says it will diversify its supply chains to spread risk more widely.
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“The goal is not to disconnect us,” said Chancellor Scholz on Twitter.
“However, we want to avoid critical dependencies in the future. With [the strategy] we are responding to a China that is changing and taking a more offensive stance.”
“It is a priority for us to reduce such risks swiftly and at a cost that is acceptable to the German economy, especially if such risks concern products that are essential for health, the energy transition or technological innovation,” the strategy document reads.
The strategy document specifically cites dependencies Germany has on China for various metals and rare earths and lithium batteries.
It says Germany’s raw materials partnerships will “benefit all countries involved”, with the aim to “support our partners in keeping more value creation in their own countries”.
“In so doing, we are not only promoting prosperity in the countries of origin, but also the long-term competitiveness of the companies there by acquiring expertise and innovations, independent from the mere extraction of raw materials.”
It’s not the only country looking to reduce its dependency on raw materials for electric vehicle batteries, with the United States’ recently passed Inflation Reduction Act incentivising automakers to produce EVs and batteries locally.
Germany says it’s “not pursuing decoupling from China” in the technology sector, as “the creation of separate technospheres is not in our interest”.
However, it says it’s intensifying international cooperation in the sphere of technological innovation and aims to strengthen its cooperation with “partners who share our values”.
Germany says it’s not just reducing its dependency on China as a means to alleviate risk, but also in response to concerns about setbacks in the Asian superpower regarding civil and political rights and curtailed contact with research institutes and government agencies.
It also argues China’s economic strategy “aims to make it less dependent on other countries, while making international production chains more dependent on China”.
“In terms of foreign policy, China is pursuing its own interests far more assertively and is attempting in various ways to reshape the existing rules‑based international order,” the document reads.
“This is having an impact on European and global security,” it adds, noting the country’s relations with others “have deteriorated significantly as a result of this robust approach”.