Small Contraction for German Economy in Fourth Quarter

The German Ministry of Foreign Affairs wants to introduce strict rules for companies that do intensive business with China.

This is stated in a confidential document that the Reuters news agency has seen. With the proposed measures, Chancellor Olaf Scholz wants to reduce dependence on China further.

The draft document highlights the automotive and chemical industries and describes plans to make it attractive for German companies to become less dependent on exports. However, before the document is approved, it must pass through several ministries. A final decision on Germany’s China strategy is expected early next year.

China became Germany’s largest trading partner in 2016 due to the high demand for German cars and machines. However, the relationship with China was investigated after Russia invaded Ukraine earlier this year. With that, the relationship between Russia and Germany, which was heavily dependent on Russian gas, came to an abrupt halt. “We must not make this mistake again. This is the responsibility of politicians and companies,” the document describes.

The German government has previously blocked the sale of companies to Chinese investors. For example, chip manufacturer Elmos from Dortmund could not get into the hands of competitor Silex, a Swedish subsidiary of the Chinese Sai Group.

On the other hand, the German government allowed the Chinese state-owned company Cosco to acquire an interest of almost 25 percent in a container terminal in the port of Hamburg. Several ministers criticized that decision.

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