Singapore In Singapore, an orchid is traditionally named after guests of state. Helmut Kohl got one, Angela Merkel, Nelson Mandela too. On Monday it is Olaf Scholz’s turn, she will be baptized “Renanthera Olaf Scholz”. “A nice red,” says Scholz. “Reminds me of my party.”
On the same day, Vice-Chancellor Robert Habeck – also in Singapore – goes onto the stage at the Asia-Pacific Conference (APK) of German business, puts on his reading glasses and, quite uncharacteristically, begins to read his speech monotonously. One almost gets the impression that the chancellor is speaking.
A few hours later, the chancellor and vice chancellor briefly crossed paths at the conference. For Scholz, Singapore is just a short stopover on his five-day trip to Asia, but he and Habeck are on a mission together. The chancellor and his deputy want to strengthen trade relations with the states in the Asean region, which also include Singapore and Vietnam, in order to reduce economic dependency on China.
But the two have differing opinions on how quickly this should happen, whether the federal government should, if necessary, force the economy to become more independent of China and how much Germany should cut ties with the People’s Republic.
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Scholz believes that decoupling from China is wrong and pushed through the port deal in Hamburg with the Chinese state-owned company Cosco against all odds. Habeck, on the other hand, tried to prevent the Cosco deal. And for months he has had his officials fine-tune concepts on how to use politics to get the economy to become more independent of China.
The new way of dealing with China
Especially after the dispute over the port of Hamburg, it seemed as if deep rifts were opening up between the chancellor and the economics minister when it came to China policy. In Singapore, the two now talk about China in quick succession. There it shows: Scholz and Habeck are not as far apart as it sometimes seems. Both want alternatives to China, but not withdrawal from the People’s Republic.
>> Read here: Scholz in Vietnam – The struggle for independence
Neither of them want to come home empty-handed from their travels. Habeck therefore signed an agreement with his Singaporean counterpart on Sunday at the famous Hotel Marina Bay Sands, where three high-rise towers support a top floor in the shape of a ship. Among other things, they agreed on closer cooperation on climate and economic policy.
The speech for this was a typical Habeck, he ignored his speaking slip, he talked straight away, but got increasingly bogged down and messed things up. The business representatives seemed slightly disturbed.
It is not known whether the persistent reading the next morning was a reaction to the previous evening. In any case, the monotonous tone lasted only a few minutes. Then the reading glasses disappeared from his nose and the minister resumed speaking freely. And always when it came to the elephant in the room: China.
We are in systematic competition with China and we should not be naïve. Economics Minister Robert Habeck
It is well known that Habeck takes a China-critical approach. In recent weeks, however, he has disarmed his communication skills, repeatedly emphasizing that diversification does not mean a complete departure from the People’s Republic. At APK, that was also the mantra at first. But on Monday morning, Habeck became clearer: “We are in systematic competition with China and we should not be naive.”
Chancellor Scholz made a similar statement in his speech: China needs to be dealt with in a new way, and that means above all finding new partners for German business.
Economy wants to move slowly
But the question of how to get there remains a contentious one: especially regarding the options of whether companies will move on their own and diversify their businesses if governments prepare the ground for them. Or whether they have to be carried there.
Many business representatives emphasized at the APK that they are already taking care of the diversification themselves. Behind closed doors, however, a different picture emerged. The approach is correct, but first of all the motto “always slowly” is put into practice, reported participants.
We don’t diversify, we deepen dependency. Economics Minister Robert Habeck
In Singapore, Habeck repeatedly let it shine through that he saw the federal government as responsible. “We’re not diversifying, we’re deepening dependency,” he warned the German economy against erroneous development, despite all declared intentions.
Months ago, Habeck wanted to cut the investment guarantees for German companies abroad, and the proposal for a cap was already on the table in the summer. But initially there were concerns in the federal government, including in the chancellery.
In the end, Habeck largely got what he wanted: the state investment guarantees worth billions are limited by comprehensive new rules. According to government circles, his government partners prevented him from only explicitly naming China. Even if the law was of course mainly aimed at China. That describes the current dealings of the federal government with China quite well.
More: Interview with Siemens CEO Roland Busch: “Diversification is not possible without China”