Chancellor Olaf Scholz’s administration is urging Germany’s largest companies to ensure their risks in China are manageable as part of broader efforts to reset relations with the Asian superpower.
The government is notifying companies such as BASF, Volkswagen, and Siemens that they must avoid getting too deeply involved in China in case tensions escalate. This move, aimed at preventing state bailouts, is part of a new strategy approved by Scholz’s cabinet on Thursday to handle the world’s second-biggest economy more cautiously.
“Companies must adequately consider geopolitical risks in their decision-making process,” the government in Berlin stated in the 40-page document published on the foreign ministry’s website. “The costs associated with concentration risks must be more internalized by companies so that state funds don’t have to be utilized in the event of a geopolitical crisis.”
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