In a rousing speech last week, Chancellor Olaf Scholz of Germany called for a renewed Marshall Plan to help Ukraine’s reconstruction. But in addition to rebuilding after a genocidal regime, the leader of Europe’s largest economy is trying to deepen business ties with another. Later this week, Scholz will lead a business delegation to China.
International trade between two of the world’s largest economies is a fact of life. But the chancellor’s decision to shift her diplomatic weight to closer business ties with China shows how little Scholz has learned from Europe’s unfortunate dependence on Russian oil and gas. Despite persistent and pointed warnings from the Bush, Obama and Trump administrations, German political elites have prioritized cheap Russian gas and lucrative private liens over strategic self-restraint and energy diversification.
History now shows that Putin’s energy hug has also proven to be a way to pressure Europe while the Russian dictator besieges independent Ukraine. And like its misguided cooperation with Russia, Germany’s engagement with China goes much deeper than a deaf business delegation. Against opposition from members of his own cabinet and the European Union, the chancellor last week rallied a sufficient number of ministers to approve the sale of a stake in Germany’s largest port to a Chinese state-owned company. An internal memo from Germany’s Foreign Ministry is said to have warned that the deal “disproportionately expands China’s strategic influence.”
But past mistakes need not determine future paths. Despite platitudes about the risks of Russian energy dominance, in May 2021 the Biden administration waived sanctions on the Nord Stream II project, which would have piped additional Russian natural gas into Germany. The Biden team’s recently released National Security Strategy hinted at a lesson learned, specifically warning: “Beijing often uses its economic might to coerce countries.” Recent efforts to revitalize and protect the semiconductor industry, such as the CHIPS Act, indicate that the White House is taking its own warnings increasingly seriously.
The visuals of Scholz’s journey are made worse by the communist regime’s recent shift towards one-man rule. Long gone are the days of Western hopes that global economic integration would lead China to economic and political liberalization. Rather, Xi Jinping has secured a third term as General Secretary of the Chinese Communist Party, in violation of protocol. If there were any doubts about Xi’s unchecked power, idiots’ mistreatment of former leader Hu Jintao on live television should dispel them. While Xi’s consolidation of power has prompted a “spectacular sell-off” in Chinese assets, Scholz appears undeterred in promoting closer business ties.
This Janus-faced German diplomacy does little to assuage the feeling that NATO is more an exercise in American altruism than a beneficial alliance. Despite Western Europe’s Russian energy madness, the United States stands ready and willing to support the embattled continent by approving tens of billions of dollars in aid. While the people of Ukraine deserve support in their struggle for freedom, a not inconsiderable part of these funds goes to neighboring and nearby countries in Europe. At the same time, about 100,000 American military personnel are stationed in Europe.
In contrast to a flood of American aid to Europe, Germany’s own military spending will remain below NATO’s collective target of at least 2 percent of gross domestic product. For context: Germany has not achieved this goal since the hammer and sickle flew over the Kremlin. A number of promises to break this frugal success record earlier this year have already fallen by the wayside.
Though the federal government is ignoring the coercive underbelly of Chinese economic diplomacy, law enforcement agencies in the United States are struggling to contain it. Last week, Attorney General Merrick Garland announced charges against 13 suspected Chinese spies. They are accused of a range of crimes, from recruiting American government officials to harassing former Chinese residents.
These now public cases represent just the tip of the iceberg. Earlier this year, FBI Director Christopher Wray revealed that “there is no country that poses a broader and more serious threat to our innovation, ideas and economic security than China.” . According to Wray, the bureau launches an investigation into Chinese espionage every 12 hours on average. But the United States is not the only target. The scale of Chinese espionage in Europe has been described today as “on par with the Russians”.
Still, the parallel risks of economic ties with Russia and China appear to be lost for the leader of Europe’s largest economy. As the United States balances its support for European security with its competition with Beijing, a public endorsement of closer economic ties with China puts Berlin in the bargain of betrayal.
A coherent and mutually beneficial relationship among NATO members is the first best option for the United States and Europe. But Germany cannot have its military alliance and eat it too.
Oliver McPherson-Smith is a research fellow at Stanford University’s Hoover Institution.