Germany published its first China strategy on July 13, following an eventful June as Europe geared up to face China's growing heft and as the US-China tech war further escalated. Despite having taken a critical first step towards aligning its foreign and security policies with its technology policy while striving to balance competition and cooperation with China, Germany, in its pursuit to strengthen foreign policy autonomy, will only notice the lack of it in the absence of a complete national security narrative.
Strategic overhaul continues
In fact, the China strategy marks Germany's ongoing strategic overhaul based on its first ever National Security Strategy unveiled in June. June also saw the Netherlands formalizing export controls on semiconductor upstream equipment, including those used for deposition, epitaxy, and immersion lithography, while the European Union (EU) set out an Economic Security Strategy aiming to give closer scrutiny of issues related to supply chain resilience, technology security, and the weaponization of economic dependencies. Berlin's China strategy raised similar concerns, and also seeks to address the challenge of Chinese "civil-military fusion" through improving its export controls and investment screening mechanisms. Meanwhile, the US is rumored to be tightening its control on AI chip exports to China.
The China strategy reiterates what was already stated in Berlin's National Security Strategy, that "China is a partner, competitor and systematic rival." Though the document indicates that the systemic rivalry reflects how Berlin differs with Beijing in global governance concepts, it also stresses that cooperation with China is still possible. Above all, Berlin emphasizes in the strategy that it doesn't have the intention to impede China's economic progress and development, and that it is not economically decoupling with China, though de-risking is urgently needed. "We want to preserve our close economic ties with the country. However, we want to become less dependent in critical sectors in order to reduce the risks they entail," the strategy states.
Who draws the line, and where?
Alongside economic dependency, the strategy also acknowledges that China has entered a geopolitical rivalry with the US, and that China is seeking to develop and lead the world in the application of emerging and disruptive military technologies. In light of this, Berlin notes the responsibility to coordinate with partners on preventing cutting-edge technologies from being used to further Chinese military capabilities, especially dual-use technologies. It further notes its commitment to adjust export control lists in international export control regimes and to review national export control lists, in addition to acknowledging the importance to supplement export and domestic investment controls with measures to screen outbound investment.
However, given the blurring line between civil and military technologies, Berlin will find it increasingly challenging to draw the line. In response to the China strategy, for example, Infineon CEO Jochen Hanebeck has expressed the hope that German export controls can be limited to "really few critical areas." Without a further clarification of Germany's objectives when it comes to restricting Chinese military modernization, the inevitable questions rise: where to draw the line when deciding the technologies to restrict, and who draws the line? In other words, the latest strategy falls short of detailing German objectives, leaving it vulnerable to US pressure as the latter's military objectives demand pursuit of a harder line on technology restrictions to China and an expectation that allies follow suit. Discussions of a Germany-imposed ban on chip chemicals in April, as reported by Bloomberg, attest to this dilemma which Berlin will frequently face as the US-China chip war intensifies.
It is worth noting that direct German military engagement with China in the Indo-Pacific remains far-fetched at this point. As acknowledged in its strategy on China, Germany only has a "temporary military presence" in the region for now, in the form of naval patrols and participation in multinational joint military exercises, despite the release of the country's own Indo-Pacific strategy in 2020. In this context, Germany's China strategy has to be backed up with a more comprehensive narrative that directly addresses China's military might, especially in matters related to export controls and investment screening. Falling to do so would only convey a false sense of autonomy.
