Merz Demonstrates Lack of Backbone in His China Management Approach

Tackling China: Friedrich Merz and the Uncertain Path Ahead

by Bernd Ziesemer

Merz's approach towards China appears weak and insufficiently assertive. - Friedrich Merz appears to be hesitant to confront China head-on

In the latest federal government's coalition agreement, the topic of China spans a mere eleven lines. The new administration intends to work harmoniously with Xi Jinping, stick to the rules, maintain a "de-risking" policy, and collaborate with EU states and Western allies[1]. This approach mirrors the lukewarm stance of Olaf Scholz and Angela Merkel, leaning towards business as usual[1]. However, one sentence hints at a potential shift: the acknowledgment of "elements of systemic rivalry" stirred by China's actions[1].

Neither the Chancellor Friedrich Merz nor his foreign minister Johann Wadephul or minister of economics Katherina Reiche boast extensive knowledge about China. Consequently, the contract's practical politics might face limitations[1]. Unlike policy in Ukraine, it remains unclear how the new federal government intends to differentiate itself from its predecessor[1]. This lack of clarity increases the possibility that German industry and China's state-owned economy will continue to exert undue influence[1].

The term "outsourcing" of German policy towards the People's Republic, coined by China expert Andreas Fulda, stands fitting in this context[1]. Given that the Merz government aspires to project a pro-business image, there is a risk of perpetuating this questionable strategy[1].

China's Test for Friedrich Merz

The upcoming Merz administration may encounter more substantial challenges regarding China compared to its predecessors. In the near future, there is a risk that Germany will find itself in the crossfire of the US-China trade war. The influx of Chinese exports and dumping prices poses grave threats to the German economy[1]. Additionally, the escalating support that China offers for Russia's conflict with Ukraine might prompt the new federal government to impose secondary sanctions on Chinese companies[1]. Lastly, Germany needs to prepare for worsening conditions around Taiwan, with potentially disastrous repercussions for the global economy[1].

It was Olaf Scholz himself who resisted a more assertive stance towards Beijing[1]. To illustrate, consider efforts to prevent EU-level tariffs on Chinese car exports or the confusing back-and-forth over Huawei and the Chinese attempts to infiltrate Europe's critical infrastructure[1]. The Merz government will have to decide whether to deviate from Scholz's approach in specific disputes. The German government wields the "key to a more united and effective European stance towards China," according to Noah Barkin, a foreign policy expert [1]. This statement holds true.

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Friedrich Merz
China
Xi Jinping
Donald Trump

Enrichment Data:

Economic Dependencies

Continued Investment in China: Despite the rhetoric of reducing dependence on China, German companies hold substantial investments in China, particularly in the automotive sector[3]. This economic engagement could impede the government's efforts to significantly alter its stance, which may impact investments[3].
Public Sentiment: Public opinion is split, with 30% viewing China as an ally or necessary partner, which may influence policy decisions and necessitate a delicate balance[3].

Geopolitical Pressures

EU-China Relations: Navigating EU-China relations might prove complex for the Merz government as it endeavors to strengthen European cooperation on China policy[3].
US Influence: The US's push for stronger stances against China could exert pressure on the Merz government, aligning with Merz's more hawkish views, but potentially straining relations within the EU[1][3].

Diplomatic Engagement

Chinese Expectations: China's leadership expects deep cooperation with Germany to guide China-EU relations constructively. Managing these expectations while remaining cautious could pose diplomatic difficulties for the Merz government[1].

The European Union, committed to the implementation of the Paris Agreement, is facing trade wars and geopolitical pressures from China under the leadership of Xi Jinping.
Friedrich Merz, the new Chancellor, along with his foreign and economic ministers, have limited knowledge about China, potentially leaving practical politics unclear.
China's state-owned economy and German industry might continue to exert undue influence, as the new administration aspires to project a pro-business image, risking the perpetuation of questionable policies.
The Merz administration may encounter more substantial challenges regarding China, including the risk of being caught in the crossfire of the US-China trade war, escalating support for Russia's conflict with Ukraine, and worsening conditions around Taiwan.
Olaf Scholz, Merz's predecessor, resisted a more assertive stance towards Beijing, making it necessary for the Merz government to decide whether to deviate from Scholz’s approach in specific disputes.
The German government holds substantial investments in China, particularly in the automotive sector, which could impede efforts to significantly alter its stance towards China and impact investments.
Navigating EU-China relations and managing Chinese expectations while remaining cautious could pose diplomatic difficulties for the Merz government, with the US's push for stronger stances against China potentially exerting pressure and potentially straining relations within the EU.