Shifting Politics: The Future of Germany’s China Policy

Germany’s China policy is at sea, drifting without an anchor. In the past, it was underpinned by a clear selection of people, principles, and policies. Driven by the Merkel Chancellery, under the guiding principle of Wandel durch Handel (change through trade), Germany pursued a transparent policy of engagement in the hopes of influencing China to become more liberal and democratic. 

But this constellation has ended, or rather, it has failed. Over the course of Angela Merkel’s 16-year tenure, China has changed. This change has, however, been for the worse, not the better. Beijing has become both more authoritarian domestically and antagonistic internationally. Despite this shift, Berlin was incapable of departing from its political course. Doing so would have openly admitted failure of a long-standing policy.
The inauguration of the new German government has offered a necessary break. Former advisors and ministers in Merkel’s cabinet have grasped this as an opportunity to distance themselves from past policies. So too did Angela Merkel herself, to some degree, when she acknowledged that Germany may have been "too naive in our approach to some cooperation partnerships".

Now, German China policy is at an inflection point. This year, the new traffic light coalition will draft Germany’s first-ever China strategy. But which strategic direction will it follow? 

There are three broad dynamics amongst stakeholders that will determine Germany’s China policy. These three principles, and the answers the German government will give to fundamental questions on the world order, will influence and determine the shape of Sino-German relations. 

With regards to determining actors, three dynamics are at play: 

• Internal party dynamics, particularly among the Social Democrats, where a more vocal faction of China critics has emerged in the parliamentary group. 
• Coalitional dynamics between the Greens, Free Democrats (FDP) and Social Democrats (SPD), with the former two being more critical of China than the latter.
• The dynamics of both the domestic and foreign environment, which will be shaped by public opinion, business and civil society (mutually divided about how to approach China), Germany’s European partners and allies, as well as China’s own behavior.

Within this myriad constellation of forces, three broad principles can be discerned. 

First, the policy of pure engagement, encapsulated by Wandel durch Handel. Second, an opposing policy of diplomacy and deterrence, articulated by Green Foreign Minister Annalena Baerbock during the election campaign with the principle of Dialog und Härte (dialogue and toughness). And third, the EU’s triangular strategy of labeling China a partner, competitor, and systemic rival; a principle which acts as a compromising catch-all phrase in the German government parties coalition treaty. 

It remains to be seen which strategic direction and political line will prevail. What we are witnessing today is a tug of war between the adherents of a largely engagement-centered strategy, and those who favor diplomacy and deterrence.

With the end of the Merkel era, political momentum favored a more critical China policy. Over time, the general mood in Germany towards China had become more unfavorable: business representatives have been more vocal in their criticism, and the Greens and the Free Democrats -parties with a tougher stance towards Beijing - have entered the government.