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Sunday, Feb 05, 2023

The stark US-German differences on China

The stark US-German differences on China

The transatlantic partners split on the nature of the country under Xi, and the extent of economic partnership with Beijing.
There’s a growing risk that the United States and Germany are headed for a collision over China.

Both countries recognize China has changed and that a new approach toward Beijing is required, of course, but the differences between their approaches were recently underscored by the talks their leaders had with Chinese President Xi Jinping.

Chancellor Olaf Scholz flew halfway across the world, with a retinue of leading German business leaders in tow, for an 11-hour visit on Xi’s home turf. He wasn’t the first Western leader to land in Beijing since the onset of COVID-19, but he was the first to meet with the Chinese president since his total consolidation of power at the Communist Party’s Congress.

By contrast, U.S. President Joe Biden met with Xi on the margins of the G20 summit, arriving on the tailwinds of a strong electoral showing in the midterms and the publication of his National Security Strategy — which emphasized the centrality of strategic competition with China — while showing the determination to discuss how to prevent the growing competition between their two countries from descending into open conflict.

Of course, the substantive outcome of the two meetings wasn’t dissimilar — both Scholz and Biden focused on Taiwan, human rights, market access and Russia’s war on Ukraine. Importantly, Scholz convinced Xi to publicly confirm they “jointly oppose the use of, or threats to use, nuclear weapons” — a direct rebuke of Russia’s saber-rattling throughout months of war.

Yet, when it comes to China, there are stark differences between the the U.S. and Germany, and notably between Scholz and Biden. And these concern three core issues — the nature of China under Xi, the drivers of global politics and the extent of economic partnership with China.

Scholz recognizes that China under Xi has changed, but it’s not clear whether he truly understands how much Xi has changed China and its ambitions. Writing in these pages, Scholz noted that after the Party Congress’ avowed display of Marxism-Leninism, the “quest for national security — synonymous with the stability of the communist system — and national autonomy will be more significant going forward.”

But it won’t just be more significant — the power of the communist party and system over China is at the very core of Xi’s unrivaled rule. China under Xi is no longer a country that aims to grow economically and bring hundreds of millions of its people out of poverty, nor is it still satisfied to follow Deng Xiaoping’s dictum that China “hide its strengths, bide its time.”

Rather, it is a country seeking to overhaul the international system. As former Australian Prime Minister Kevin Rudd observes, China’s president wants an international system “anchored in Chinese rather than American power and one that reflects norms more consistent with Marxist-Leninist values” rather than Western values.

This is also Biden’s view. His National Security Strategy states that the People’s Republic of China is “the only competitor with both the intent to reshape the international order and, increasingly, the economic, diplomatic, military, and technological power to do it.”

These different points of view on Xi’s ambitions for China are also compounded by Scholz and Biden’s diverging views on what drives international politics today. For Scholz, the central force of change in global politics is the emergence of “new centers of power . . . in a multipolar world.” And Germany’s goal is to build partnerships with all these powers to deal with the globe’s growing challenges.

Biden doesn’t deny the prevalence of these global challenges, such as climate change and pandemics or the need to find ways of cooperating with others — including competitors like China — in order to better respond to them. But his view of today’s world isn’t of a multipolar one. Instead, he sees a China determined to overhaul the rules-based international order that has benefited countries around the world for decades — not least the leading Western powers in North America, Europe and Asia. That’s why he believes strategic competition is now the driving force of international politics.

These distinct worldviews also explain the two leaders’ disagreement over the nature of economic relations with China. Both agree that trade in nonessential goods makes sense, so long as economic dependencies are avoided, and they support diversifying markets beyond China. Where they differ is on the centrality of China’s market to their economic prospects.

Scholz insists that “China remains an important business and trading partner for Germany and Europe — we don’t want to decouple from it.” And in bringing a large business delegation with him, the chancellor highlighted that seeking economic opportunities in China remains a core goal, not just of German business but of the German government.

But today’s reality, so brutally underscored by Russia’s war on Ukraine, is that the interests of German business aren’t necessarily the same as those of the German government. Ending reliance on cheap Russian gas has dealt a blow to German competitiveness, but it was a strategic necessity.

Yet, when it comes to China, Scholz doesn’t appear to have learned that geopolitical lesson. Biden has.

To Biden, China is a strategic competitor. And while far from urging the U.S. economy’s complete decoupling from China, his administration insists on the overriding need to outcompete when it comes to sectors that undergird economic and military power — hence the decision to deprive China of access to any advanced U.S. semiconductor technology and knowledge.

Fortunately, more and more officials in Europe and, increasingly, in Germany now understand the need to shift away from the longstanding view of China as a gigantic market, seeing it instead as the strategic competitor it is. There are even loud voices within the German government urging a change — and we can only hope their voices will prevail.
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