Tensions in the sea area have increased significantly.
(Photo: dpa)
The scenario makes you shudder: In the event of a unilateral, complete decoupling from China, Germany faces four times the costs of Brexit – according to an Ifo study. Other institutes draw similar scenarios. Who would doubt that a break with Germany’s second-largest economy would entail incalculable risks – especially since the country’s economy is already being subjected to what appears to be a historic burden as a result of the Ukraine war and the associated energy shock.
Again and again politicians and business representatives warn of the devastating consequences of decoupling from China. However, there is a catch: Nobody is demanding a complete break with China.
No serious politician or expert is demanding that the German economy should be completely decoupled from China. After all, companies there are still making good profits thanks to comparatively high growth rates in many areas. A look at the innovations in the People’s Republic can also justify a presence in the huge country.
By acting with exaggerated horror scenarios, the experts and business representatives intentionally or unintentionally distract from the actual, much larger and enormously important debate. At the latest since China’s violent escalation of the Taiwan conflict this month, it should have become clear to everyone that the world is heading towards a worsening conflict between China and the USA.
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German companies in particular, whose supply chains are closely linked to China, urgently need to prepare for a further escalation of the conflict. It also makes a big difference whether a company achieves ten percent of its sales in the People’s Republic or up to 40 percent, like the German car manufacturers. The federal government and research institutes must now work specifically to identify and reduce dependencies.
Read here: Why the Taiwan conflict is so dangerous for the German economy
The operation with maximum horror scenarios does not help here. And this approach harbors another problem: By suggesting that Western governments are concerned with the complete handling of China deals, the experts and politicians are playing into Beijing’s hands. Because in doing so they serve exactly the narrative of the Communist Party: “We are the free traders,” the party claims, “it’s the West that is closing the bulkheads.” The opposite is the case.
China itself has been deliberately decoupling itself in strategically important areas for years. Conversely, the Chinese economy has benefited from the open markets, particularly in Europe, for decades. German companies willingly gave insight into their technologies, Chinese skilled workers learned from the German companies. Up until a few years ago, Chinese companies were also allowed to buy any company they wanted in Europe – a privilege that European companies in China never had.
China has changed. Beijing has repeatedly communicated very clearly and openly that it will attack Taiwan if it does not voluntarily submit. That would be the point at which there would be a direct military confrontation between the US and China. It is time for business to recognize this and act accordingly. We mustn’t be naïve and believe that it won’t cost us anything. But scaremongering doesn’t help either.
More: Fear of massive sanctions – How Taiwan wants to protect itself from China.