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The End of Panda Politics

Germany enjoys a special relationship with China – for now. The more political and economic competition that takes place between them, the more Germany will have to prepare for conflicts. Yet the instruments Germany has at its disposal for achieving its considerable interests have often been weak at best.

In the new issue of the  Asia Policy Brief, Bernhard Bartsch, Senior Expert in the programm "Germany and Asia" at Bertelsmann Stiftung, analyzes the close economic and political relations between the two countries and illustrates through three current issues the cracks which threaten to undermine the harmony of German-Chinese relations. 

For many years the relationship between Germany and China was reciprocal: Germany’s innovative power and China’s modernization complemented each other perfectly. But examples like the acquisition of the robot manufacturer Kuka by the chinese company Midea are unleashing fears that the Chinese could gain access to Germany’s core know-how. Yet as China aggressively expands into world markets, there will be an ongoing discussion about the difference between engaging in protectionism and ensuring business locations remain viable, a discussion that will undoubtedly feature – contentiously – in German-Chinese relations, as Bartsch estimates. 

Similar concerns underlie the debate about whether China should be granted market economy status (MES). On a substantive level, a broad consensus exists that China does not meet the requirements for MES. Businesses complain about conspicuous asymmetries in the competitive conditions faced by foreign firms in China and Chinese companies in Europe. But China’s chances of winning are generally perceived as slim were it to contest its case at the WTO. This is why the Europeans will, for the most part, have to accommodate China’s request – and begin looking for new trade-protection mechanisms that do not violate WTO regulations, is Bartsch's opinion.

Germany should prepare itself for disputes with China that are more difficult than those of the past. Until now the two countries have had little experience dealing with such situations. According to Bartsch, "the challenge will be to create structures that make it possible to endure these conflicts and prevent them from spilling over into other areas. This will require Germany to become more aware of its own interests and to develop instruments capable of achieving them."

In the Asia Policy Briefs renowned experts and authors from the Bertelsmann Stiftung analyze important developments in Asia and their consequences for Germany and Europe. The short briefing papers focus on current events as well as underlying trends in important Asian countries.

Please find the new Asia Policy Brief on the right side. All Asia Policy Brief editions can be downloaded here.


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