I penned an opinion editorial for The Hill exploring the focus of German Chancellor Olaf Scholz's trip to China.
Scholz was in Beijing earlier today with a top-flight business delegation in tow, including the CEOs of Volkswagen and BASF.
Here are some highlights:
+ This week’s biggest geopolitical business event is Germany to China.
+ As the Biden administration imposes new export controls on semiconductor technology to China and Republicans suggest that, upon taking control of the House of Representatives, as expected, they plan to review everything from Chinese military threats and COVID-19 to intellectual property theft, German Chancellor Olaf Scholz is visiting Beijing with a delegation of business leaders.
+ Setting expectations for the first EU leader to visit China since the start of the pandemic, Scholz’s spokesman Steffen Hebestreit said the chancellor is not in favor of “decoupling” from China. Examining the numbers, you can see why.
+ For democratic governments, nearly all foreign policy is driven by domestic policy. Germany’s export-driven economy can’t escape increased geopolitical tensions in the Indo-Pacific, China’s stifling zero-COVID policy, and a growing weariness of an overreliance on China’s market for revenue and economic growth.
+ Politely whispered in the past, this sentiment is now driving the dialogue with leading German economic thinkers. “The German economy is much more dependent on China than the other way round,” according to Juergen Matthes of the German Economic Institute.
+ A good rule of thumb for governing in a democracy is that good economics makes bad politics. Scholz appears committed to the economics, regardless of the politics.
+ His Germany-to-China moment has four goals: shoring up the German-Chinese commercial relationship; pressuring ministries to overlook Chinese investment in Germany; keeping the big multinational German companies happy at the expense of small and medium-sized enterprises; and reminding the U.S. elected officials that nations will do what is best for their economic security.
Access the full opinion editorial here.
Enjoy the ride + plan accordingly.
-Marc
