With hundreds of top executives, German Chancellor Olaf Scholz recently traveled to South East Asia to diversify trade relations and lessen the region’s steadfast reliance on China. Signs that Germany is beginning to distance itself from China.

The Berlin ruling coalition included the chief executives of companies like Siemens, BASF, and Deutsche Bank to Vietnam and Singapore before heading to Indonesia for the G20 summit. 

According to Bloomberg, the Russian-Ukraine war made Germany and other European governments reevaluate potential risks in their trading relationships with China. 

The Chinese regime’s avoidance of openly denouncing Putin and the escalation of its actions toward Taiwan has fueled fears in the E.U. that over-dependence on the world’s largest exporter of commodities and raw materials may hide other implications for the nations.

On Sunday, November 13, Habeck told the Deutsche Welle media that Germany is open to trade with China. Some sensitive areas, however, are not available for Beijing to invest in.

He said, “We are, of course, interested in trade with China, but not in stupid trade with China.” 

He added, “I know that the U.S. is sometimes saying harsher words, and this is not our way. So where it’s unproblematic, it’s not a problem to have trade with China. But in the problematic areas, we have to be more careful than we have been before.” 

The vice chancellor called on the telecommunications, energy, chip, and semiconductor sectors where his government seeks to retain its sovereignty. Habeck cited critical infrastructures such as ports, airports, and hospitals as areas where Chinese investment may not be welcome. 

Habeck warned German multinational groups with a strong presence in China should be aware of potential risks.

According to Marko Walde, general representative of the German Chamber of Commerce in Vietnam, 5,000 German businesses are currently working in China, and 90% of them are considering diversifying their industrial chains to lessen their impact on the Chinese economy.

On November 9, Berlin authorities stopped two Chinese takeovers of German tech companies, citing a potential loss of vital know-how.

In May this year, the German government rejected Volkswagen’s application for a guarantee to invest in China, citing the worsening human rights situation in the Xinjiang region.

It is reported that after arriving in Vietnam, Scholz will visit Singapore, the German Economic Asia Pacific meeting, and then attend the G20 summit on November 15-16 in Indonesia.

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