Hanoi, Singapore Rarely has Olaf Scholz been received so pompously on a trip abroad as on this Sunday in Vietnam. In front of the bright yellow presidential palace in Hanoi, Scholz walks through the formation of honour, schoolchildren wave German and Vietnamese flags. The Prime Minister of Vietnam greets Scholz with a hint of a triple hug, the traditional greeting among socialists.
After the Russian attack on Ukraine, “we are experiencing a turning point,” said Scholz in Hanoi. “As a consequence, we have to expand our sales markets, our supply chains, our sources of raw materials and production sites so that we are not dependent on individual countries. Vietnam plays a very, very crucial role in this.” Germany wants to support Vietnam’s transition towards climate neutrality, for example by expanding the metro connections in the metropolis of Hanoi.
Greater cooperation in the field of energy was also discussed with Prime Minister Pham Minh Chinh. In principle, the conditions for closer economic cooperation between the two countries are not bad. Germany is already Vietnam’s most important trading partner within the EU with a trade volume of 14 billion euros.
Top jobs of the day
Find the best jobs now and
be notified by email.
A free trade agreement was concluded between the EU and Vietnam two years ago. In addition, there is a “historical proximity” between Germany and Vietnam, as one government official put it. Many Vietnamese lived in the GDR, and there are still 180,000 citizens of Vietnamese descent in Germany today. How close the exchange is was also shown during the pandemic. In an early phase of Corona, Vietnam donated 80,000 masks to Germany, and the Federal Republic later returned the favor with a delivery of ten million vaccine doses.
Scholz’ is traveling to Asia for the third time
On his trip, Scholz hopes above all for greater cooperation on raw materials. Vietnam is rich in copper, titanium and zinc, many reserves have not yet been mined.
However, the visit must also be seen in a larger context and is part of Germany’s “increased ambition” in the Indo-Pacific, according to government circles. In the past six months, Scholz first traveled to Japan, then to China, and now to Vietnam and Singapore. There have also been the first government consultations with India.
This new offensive serves two goals: In addition to reducing strategic dependencies, Scholz wants to bring countries in the Indo-Pacific region, such as Indonesia, closer to the West and isolate Kremlin chief Putin more. However, Vietnam also showed how difficult it will be to reduce strategic dependencies on China, despite all the new efforts in the Indo-Pacific. Relations with its big neighbor China are close, like the People’s Republic, Vietnam also abstained in the UN General Assembly and did not condemn the Russian war of aggression against Ukraine.
In Hanoi, Scholz made no secret of the fact that he thought that was wrong. The Russian attack is a breach of international law. “We would therefore also like Vietnam to take a clear position on this issue,” said Scholz. The Chancellor also addressed the difficult situation of human rights activists, climate activists and political foundations in the socialist republic. And the state of press freedom quickly became clear on the trip: questions were not allowed at the press conference by Scholz and Vietnam’s Prime Minister Pham Minh Chinh.
On Monday, Scholz will travel with a business delegation to the Asia-Pacific Conference (APK) in Singapore. There he meets Federal Economics Minister Robert Habeck, who is also spending the entire weekend there with a number of managers.
Olaf Scholz and Vietnamese Prime Minister Pham Minh Chinh on their way to the joint press conference.
(Photo: Reuters)
In Singapore, Habeck explained the search for new partners: “We need all of this faster than before.” On Sunday, the Economics Minister signed a declaration of intent with the Singaporean government to intensify relations. Habeck called for more speed, especially with trade agreements: “The world is not waiting for Germany and Europe to get into the hooves.”
There is competition in the search for new partners
The federal government is currently working on a new China strategy. On Friday, the federal government agreed on a first part: the federal government’s investment guarantees in China, which are worth billions, are to be limited. The economy is therefore also warning against excessively high expectations. “Diversification is crucial, but you can’t change everything all at once,” DIHK President Peter Adrian told Handelsblatt. Scholz sees it that way too.
>> Read here: New rules for investment guarantees unsettle the German economy
However, the question is how much time Germany has. The US offers companies major tax advantages as part of their “Inflation Reduction Act”, which is why the Chancellery sees the danger that German companies could migrate to the US.
At the same time, there is another danger: the USA is currently imposing a series of sanctions on China. Dozens of Chinese companies, such as those in the solar and semiconductor industries, are on a blacklist that makes it difficult for them to access the American market.
The Biden government recently passed new export controls designed to slow Beijing’s technological and military advances. In Berlin there is concern that the German economy could be drawn into the trade dispute.
More: Anger at the EU – German business in Vietnam complains of “loss of confidence” before Scholz’s visit