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German strategy aims to cut reliance on China, expand Taiwan trade

'Taiwan is important for Germany both as a location for German companies and as a trade partner': German China strategy paper

Taiwan and German flags. (Freepik, DanaCS image)

Taiwan and German flags. (Freepik, DanaCS image)

TAIPEI (Taiwan News) — In its first “Strategy on China" released on Thursday (July 13), Germany said that it plans to reduce its dependence on China while expanding trade with Taiwan.

In the 40-page document, the German government said "China has changed. As a result of this and China’s political decisions, we need to change our approach to China." The document also pointed out that China's decision to expand relations with Russia also has security implications for Germany.

The paper said that Germany will continue to expand its security policy and strengthen its military cooperation with partners in the Indo-Pacific region. It said the status quo in the Taiwan Strait can only be changed through peaceful means.

In reference to China's military build-up in the Taiwan Strait and threats of annexing Taiwan by the use of force if necessary, the document said: "Military escalation would also affect German and European interests."

According to the report, China remains an "essential partner" in addressing global challenges such as climate change and the pandemic. Yet Beijing is also "increasingly assertive in striving for regional hegemony," seeking to alter the rules-based international order with implications for global security.

On the economic front, the strategy report also outlines plans to reduce its heavy reliance on China in critical sectors, which is aligned with the European Union's policy on China.

China became Germany's largest single trading partner in 2016. Given its close business relationship with China, Germany is concerned about the impact of the EU's de-risking strategy on its economy, which is already in recession.

In a tweet posted on Thursday, German Chancellor Olaf Scholz wrote: "Our aim is not to decouple (from Beijing). But we want to reduce critical dependencies in the future."

As for Germany's strategy for Taiwan, the paper said the "one China policy" is the basis for its actions. Although it pointed out that it only has diplomatic ties with China, "Germany has close and good relations with Taiwan in many areas and wants to expand them."

The document said that Germany supports issue-specific involvement for Taiwan in international organizations, including those organized by the U.N. and its specialized agencies. It warned about the vulnerability of the semiconductor supply chain due to the situation in the Taiwan Strait and that it is working on a bilateral level at "de-risking and relations" to counteract this vulnerability.

The strategy warned of Chinese disinformation campaigns tied to Beijing's policy on Hong Kong and Taiwan. It added that Germany has economic and technological interests in Taiwan and that "Taiwan is important for Germany both as a location for German companies and as a trade partner."

According to the paper, Germany is seeking to defuse the tensions in the Taiwan Strait through deescalation. It said the status quo in the Taiwan Strait "may only be changed by peaceful means and mutual consent."