Can Berlin Get Tough on Beijing?

Like all leaders who stay on too long, German Chancellor Angela Merkel has left her successor with an inbox of unfinished business—but also with opportunities to revise policies that have outlived their usefulness. Nowhere is that better illustrated than in Germany’s moribund strategy toward China.

Early on, Merkel was nimble and self-confident in dealing with China. She quickly made China one of her foreign policy priorities: she visited China just six months after taking office in late 2005, the first of 12 visits, more than all her predecessors combined. That made China her most visited country after Russia, the United States, and Germany’s European neighbors.

Merkel also seemed able to balance interests that tripped up other world leaders. She was a welcome guest in China, helping open doors for German businesses and making Germany one of the most popular foreign countries in China. Germany provided the machine tools needed for China’s rapid industrialization and the most popular car brands in what has become the world’s largest automobile market. Last year, China was Germany’s biggest single trading partner, eclipsing the United States and every EU country.

At the same time, Merkel didn’t hesitate to speak out on human rights. In 2007, she met the Dalai Lama in her office and shrugged off the subsequent anger of Chinese officials. She also supported an EU arms embargo on China, despite coming under pressure from industry leaders to drop it. She tried to arrange for the ill Nobel Peace Prize laureate Liu Xiaobo to leave China for medical treatment and later successfully pressed Chinese leader Xi Jinping to let Liu’s widow, Liu Xia, emigrate to Germany.

Merkel’s strategy made sense on many levels. Germany has no major strategic interests in the Pacific and depends largely on trade for its prosperity. Finding a way to benefit from China’s rise while maintaining Germany’s democratic principles was feasible. That was especially true when she took office; back then, China was relatively open under the leadership of President Hu Jintao and his premier, Wen Jiabao. Beijing may not always have pursued economic reforms with vigor, but it did allow Chinese civil society a greater degree of freedom.

The idea that trade and engagement could change China resonated especially strongly in Germany. The old West German strategy of pursuing Wandel durch Handel (change through trade) in its dealings with the Soviet Union contributed to the breakdown of barriers and the building of trust that allowed Germany to reunify with little Soviet opposition. In their dealings with China, Merkel and other German policymakers saw a reflection of their country’s own transformation. Unfortunately for them, China went the other way—and German policy struggled to adjust.

THE GROUND SHIFTED BENEATH HER FEET

Even before Xi assumed leadership in 2012, the Chinese Communist Party was tightening its grip on society and the economy. Under Xi, these trends accelerated and deepened, leading to a reassertion of control over parts of the economy, a crackdown on the once freewheeling city-state of Hong Kong, and an aggressive policy of Chinese cultural assimilation in the Turkic border region of Xinjiang.

Merkel’s China policy, however, did not truly respond to these changes. Even after China sanctioned German academics and think tanks (about which she said nothing) in March of last year in response to EU sanctions to punish China for alleged human rights abuses in Xinjiang, Merkel and France’s Emmanuel Macron pushed through the Comprehensive Agreement on Investment (CAI) between the EU and China. This was a trade deal meant to win market access for European firms in China—but it sidestepped the most contentious issues, such as government control over key industries and the lack of a comprehensive way to resolve disputes. German and French officials rammed the deal through on December 30—two days before Germany’s term in the EU’s rotating presidency ended—showing just how keen Merkel was to make commerce the cornerstone of Europe’s future relations with China.

Merkel did not truly respond to the authoritarian turn in China.

Merkel’s commitment to trade with China irrespective of its authoritarian turn under Xi reflects a kind of skepticism about the ability of open societies to survive. Policymakers seem to doubt Europe’s ability to stand up to Chinese coercion in the future, especially in the not altogether outlandish scenario in which the United States returns to some version of Trumpism and its relative indifference to traditional allies. Better to nail down a trade agreement now, before Europe’s bargaining position further weakens.

Overall, however, Merkel’s approach is to manage problems rather than to anticipate them. She has adeptly dealt with crises and challenges at home and abroad, but mostly in a reactive way that doesn’t suggest a coherent and consistent strategy. The chancellor counterbalanced her boldest move—allowing a million refugees to emigrate to Germany in 2015—two years later when she pledged that “2015 must not be repeated.” In the process, she ducked the politically charged issue of encouraging regular flows of immigrants to Germany, something the country badly needs as its workforce ages and dwindles.

The ground has also shifted out from under Merkel inside her own country. In early 2019, the Federation of German Industries (BDI) issued an influential paper calling China a “systemic competitor”—not just a country prone to some unfair economic practices but a country that wanted to supplant its competitors.

That was followed two months later by a European Union paper that largely mirrored the BDI’s claims, analyzing China in a tripartite frame: Beijing is simultaneously a potential partner in solving global issues, an economic competitor, and a systemic rival. The widespread change of attitude was also reflected in the European Parliament’s rejection of the CAI earlier this year. Merkel may have stuck to her decade-old approach to China, but most of Europe was moving on.

A NEW LANDSCAPE

Recent national elections in Germany will likely push the country’s dealings with China in new directions. The mixed results of the vote allow for only three possible ruling coalitions. One is a grand coalition led by Olaf Scholz’s center-left Social Democrats and Merkel’s center-right Christian Democrats—now under the leadership of her successor, Armin Laschet—as junior partners. Both parties, however, have rejected that option.

That leaves two other possibilities, both of which involve the Greens and the Liberals joining up with either the Christian Democrats or the Social Democrats—two options that likely will mean significant changes in Germany’s China policy. That is because both the Greens and the Liberals are among the sharpest critics of Merkel’s China policy, and in both scenarios, either the Greens or the Liberals (most likely the Greens) would get control of the Foreign Ministry.

Recent elections in Germany will push the country’s dealings with China in new directions.

An analysis of party platforms by the German think tank Merics has shown what could happen under the most likely outcome—a coalition of the Social Democrats, the Greens, and the Liberals. All three favor condemning China’s human rights violations and preserving Hong Kong’s autonomy. They also favor crafting more Europe-wide protections, such as the 2019 EU investment-screening mechanism, which aimed to prevent foreign enterprises from buying up strategic industries. EU officials introduced the mechanism after high-profile Chinese purchases of utilities and advanced technology companies in EU member states.

Embracing this sort of agenda could return Germany to a more forceful foreign policy toward China, echoing the period from 1998 to 2005 when the Greens’ Joschka Fischer was foreign minister. Motivated by the party’s strong positions on human rights, Fischer advocated for German participation in the Kosovo war and the stationing of troops in Afghanistan.

This does not mean that a new German government will immediately confront China. Under Merkel, policy toward China became a Kanzlersache (the chancellor’s business), especially given the economic importance of maintaining good ties. This is unlikely to change dramatically under Scholz, although it wouldn’t prevent the new foreign minister from speaking out on human rights violations.

SPEAKING TRUTH TO CHINA

The European consensus of seeing China as simultaneously a partner, a competitor, and a rival has now been taken up by most Western countries, including the United States under President Joe Biden. But what that understanding means in practice is unclear. Should it spark more trade sanctions, even though they do not seem to work? Should Germany prepare for more military engagement in the Asia-Pacific region, even though such actions would be largely symbolic, given Germany’s (and Europe’s) limited military capacity?

One option that too often gets short shrift is simply for German leaders to speak out more forcefully in favor of what they believe—explicitly underlining what they see as acceptable norms. This forthrightness can help show that although Berlin isn’t trying to isolate Beijing, open societies will not accept China as a fully “normal” country as long as it pursues repression at home and expansionism abroad. (Germany is in a better position to take the moral high ground here than is the United States; witness the civility of the recent vote in Germany versus the debacle that followed the 2020 U.S. presidential election.)

Germany could also bolster beleaguered democracies in the region, such as Taiwan. After years of confronting Russian cyber-espionage, German officials have some expertise in this area and could help advise their Taiwanese counterparts, at least as a symbolic way of demonstrating to Taiwan that it is not alone.

Germany could also take another page out of the West German Cold War playbook and advance another policy from that era: Wandel durch Annäherung (change through rapprochement) in which West Germany agreed to cooperate with Soviet bloc countries in exchange for commitments regarding human rights. In the words of the German writer Jörg Lau, the policy’s success was the “creative combination of incentives and pressure, economics and morality, values and interests.”

Skeptics will rightly point out that China is not the Soviet Union. It is far more important economically and doesn’t need the West’s economic patronage, making it less vulnerable to pressure on human rights. But this strategy, first advocated in 1963, still offers a useful reminder that trade and values can and should go hand in hand. These ideas would let Germany break from the tiptoeing of Merkel’s later years and allow it to draw from its own profound experience, as a country that knew all too well the lures of authoritarianism but has since thrived as one of the world’s great democratic success stories.