Factbox-Germany unveils strategy on China, trade partner and rival

(Reuters) – Germany on Thursday passed its long-awaited China strategy after months of wrangling within Chancellor Olaf Scholz’s three-way coalition over how much to toughen Berlin’s stance.

Following are highlights of the paper and statements by German leaders.

GERMANY’S ASSESSMENT OF CHINA

* China is trying to create economic and technological dependencies in order to achieve political goals and interests

* China is increasingly assertive in its attempts to change the rules-based international order, with consequences for global security

* China is an indispensable partner for global challenges like climate change and pandemics

* China has changed, requiring a change in Germany’s way of dealing with China

* China’s actions have led to growing international rivalry and competition

* Germany will show solidarity with EU member states facing economic or other pressure

* Germany to relaunch human rights and rule of law dialogue with China

* China puts its interests above the United Nations’ multilateral principles and is trying to alter UN policies and programmes with its own initiatives

TAIWAN

* Germany wants to expand its close relations with Taiwan while continuing to adhere to the One-China policy

* Change of the status quo in the Taiwan Strait can only be achieved through consensus and peaceful means

* Germany supports Taiwan’s participation in international organisations

* Situation in Taiwan Strait has exposed supply chain vulnerabilities, especially when it comes to chips

TRADE AND INVESTMENT

* China increasingly pursuing political goals by economic means, including creating dependencies and granting or withdrawing economic advantages

* Chinese direct investments pose a particular challenge as China fuses civilian and military policy

* German export guarantees will be checked against risks of sensitive technology transfers, including sensitive dual use technology, and whether they strengthen dependencies

* Chinese investments must not pose risk to German security for example through sensitive technologies

* Germany plans to amend investment audit law taking into account security interests

* Germany will further develop list of goods subject to export controls in light of new technology developments such as in cyber security and surveillance

* Germany advocates close coordination in the EU and increased cooperation in the area of export controls between the G7 and other partners

* Germany acknowledges possible need for new measures to counter security risks of investments in China

* Germany will create an umbrella law determining which sectors, companies and facilities constitute critical infrastructures

* Germany will publish list of critical components this year

* Germany will check the efficacy of current rules on critical components and potentially adjust relevant laws

* Germany wants to cooperate with China on WTO reform, but also prepared to respond if there is a continued lack of progress

* Germany is pushing China to forfeit its WTO designation as a developing country as it is the second biggest economy in the world

* Germany will consistently demand comprehensive structural improvements in the market environment in China

CLIMATE CHANGE AND ENVIRONMENT

* Germany to conduct intensive dialogue with China on coal phase-out

* China must not use international cooperation on climate issues as means of exerting pressure to further its interests in other areas

* Germany sees need to push China towards more ambitious targets for reducing greenhouse gas emissions

* Germany to conduct stringent reviews on investment guarantees depending on Chinese compliance with sustainability, environmental, labour and social standards

DEFENCE AND SECURITY

* Germany is taking countermeasures on a national and European level against trans-national repression, especially on the issue of Chinese overseas police stations

* Cybersecurity threats are increasing, including from China, and increasingly these threats are impacting European government networks

* German government is advising companies and research institutes on cyber and hybrid security risks due to Chinese espionage

* Germany urges China to announce military exercises ahead of time and invite international observers to avoid misunderstandings

* Germany will expand security and military cooperation with close partners in the Indo-Pacific, including through navy deployments and multinational exercises

* China is strengthening its presence in the Arctic and Antarctica, including its military presence, but Germany wants to keep these as conflict-free areas

RUSSIA AND UKRAINE

* Closer cooperation between China and Russia on defence would impact Germany’s relations with Beijing

* China is not credible in its defence of Ukrainian sovereignty and territorial integrity. Germany is pushing for a more clear position

STATEMENTS

GERMAN CHANCELLOR OLAF SCHOLZ

“The goal is not to decouple. But we want to avoid critical dependencies in the future.”

GERMAN FOREIGN MINISTER ANNALENA BAERBOCK

“We want to diversify but we want to further expand and make use of cooperation with China at the same time. This applies to our economic contacts because we neither want to hamper China’s economic development nor our own.”

“We will protect the European economy against unfair competition by developing new and above all European tools and then jointly using them – for example the instrument against coercive measures, in which we can if necessary protect European companies against attempts to coerce by third countries, if need be including with customs or trade restrictions.”

“We cannot be indifferent on the tension surrounding Taiwan. A military escalation would also be a danger to millions of people, worldwide, meaning also for us.”

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