German minister opposes economic decoupling from China, but warns against over-reliance

Economy minister Robert Habeck has warned against over-reliance on China and called for the broadening of supply chains while reassessing “the opportunities and risks of our trade relations with China and reducing one-sided dependencies in key areas of our economy as quickly as possible.” Speaking at the AHK World Conference, organised by the worldwide network of German Chambers of Commerce Abroad, Habeck said that Russia’s war in Ukraine is a daily reminder that Germany should avoid unilateral dependencies. “We need to broaden our supply chains and diversify our trade even further,” he said. However, "economic decoupling from China is not in our interest," said Habeck. The Green Party minister also warned against the outflow of sensitive knowledge to China and said Germany should follow the U.S.’ lead by introducing greater surveillance over the Chinese businesses of German companies, Handelsblatt reports. He called for stronger state controls on certain foreign investments, noting that the U.S. government is already working on its own ‘outbound investment screening’. "I think we should do that," Habeck said, noting that no such control existed in the EU. Habeck stressed that the goal of climate neutrality was “also a prerequisite for our future competitiveness and sustainable jobs.”

Meanwhile, speaking in Berlin on Tuesday, Chinese foreign minister Qin Gang expressed concern about European calls for ‘de-risking’. “If the EU seeks to decouple from China in the name of ‘de-risking’, it will decouple from opportunities, cooperation, stability and development. China, Germany and the EU should all abide by international trade rules and the spirit of contract, keep opening up to each other and refrain from politicising normal economic, trade and investment cooperation and interfering with the market.”