German business leaders warn against withdrawing from China

Berlin — A group of senior German business leaders is warning against a pullout from China while acknowledging it is right for Germany to redefine its relationship with Beijing.

The intervention of eight CEOs in an article for the daily Frankfurter Allgemeine Zeitung on Thursday comes as Germany grapples with its future business and political ties with China. The authors included the CEOs of the industrial group Siemens, the chemical group BASF, the technology company Bosch, the automotive supplier Schaeffler and the port of Hamburg.

The locations of German companies in China and worldwide make a significant contribution to their competitiveness and China has become the second largest and most dynamic market in the world – “therefore our presence there is particularly important in the interests of German economic strength. ”

The authors argued that the potential of the Chinese market offers the chance to grow faster and be more successful in other markets and to secure jobs in Germany.

In view of China’s increasingly assertive behavior and the human rights situation in the province of Xinjiang, it is “right that Germany today defines its relationship with China in a more differentiated way, in the three dimensions of competition, cooperation and systemic rivalry”. But, they added, “in the current public discussion, we perceive an almost exclusive emphasis on systemic rivalry, in words and concrete actions.”

“Despite all of China’s challenges and with China, we are convinced that its underlying growth momentum will remain intact,” the authors write. “A withdrawal from China would deny us these opportunities.”

Chinese investment in Germany has been the focus in recent weeks as officials try to balance strong business ties with a desire to avoid mistakes with Russia, which once supplied more than half of Germany’s natural gas and is now supplying none.

Last month, Chancellor Olaf Scholz’s government coalition argued over whether to allow the Chinese shipping company COSCO to take a 35 percent stake in a container terminal in the port of Hamburg. The cabinet eventually gave COSCO permission to take a stake below 25% to ensure it was not given the ability to block company decisions.

On Wednesday, the cabinet blocked the sale of a chip factory in Germany to a Swedish subsidiary of a Chinese company and a second planned investment, which the government did not detail.

In between, Scholz visited Beijing last week.

Scholz encourages companies to diversify but does not discourage doing business with China. “We don’t want to be decoupled from China,” he said before his trip, “but we will reduce one-sided dependencies in the sense of intelligent diversification.”

In Thursday’s article, CEOs agreed that “we need to diversify risks” such as in chips, batteries and commodities.

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