Closer economic ties to China throw Germany into betrayal

In a rousing speech last week, German Chancellor Olaf Schultz called for a redrawing of the Marshall Plan to aid Ukraine’s reconstruction. Beyond rebuilding after a genocidal regime, however, the leaders of Europe’s largest economy are seeking to deepen commercial ties with another country. Later this week, Scholz will lead a business delegation to China.

International trade between the world’s two largest economies is an indisputable fact. However, the prime minister’s decision to focus diplomacy on closer commercial ties with China shows that Scholz has little to learn from Europe’s ill-fated reliance on Russian oil and gas. Despite constant and pointed warnings from the Bush, Obama and Trump administrations, German political elites have prioritized cheap Russian gas and lucrative personal leisure over strategic self-discipline and energy diversification.

History now shows that Putin’s energy embrace has doubled as a way to squeeze Europe as Russian dictators lay siege to independent Ukraine. And, like its errant cooperation with Russia, Germany’s engagement with China goes much deeper than a deaf business delegation. The German chancellor summoned enough ministers last week to approve the sale of a stake in Germany’s largest port to a Chinese state-owned company, amid opposition from his own cabinet members and the European Union. An internal report by the German foreign ministry reportedly warned that the deal “disproportionately expands China’s strategic influence”.

But past mistakes need not define future trajectories. Despite platitudes about the risks to Russian energy dominance, the Biden administration in May 2021 dropped sanctions on the Nord Stream II project, which will send additional Russian gas to Germany. The recent National Security Strategy released by Biden’s team hints at a lesson, explicitly warning that “Beijing often uses its economic power to coerce countries.” Recent efforts to support and protect the semiconductor industry, such as the CHIPS Act, show that the White House is increasingly Heed his warnings more and more.

The prospect of Schultz’s trip has been made worse by communist regimes’ recent preference for one-man rule. Gone are the days when the West hoped that global economic integration would lead China towards economic and political liberalization. Instead, Xi Jinping was given a third term as general secretary of the Communist Party, which violated the etiquette. If there were doubts about Mr. Xi’s unchecked power, the live-television rough treatment of former leader Hu Jintao should reassure them. Although Xi Jinping’s consolidation of power has sparked a “massive sell-off” of Chinese assets, Schultz does not appear to be discouraged from promoting greater business ties.

This duplicitous German diplomacy has not assuaged the feeling that NATO is more of an American altruism than a favorable alliance. Despite Russian energy stupidity in Western Europe, the United States is ready and willing to support the troubled continent by authorizing tens of billions of dollars in aid. While the Ukrainian people deserve support in their struggle for freedom, a significant portion of these funds are earmarked for neighboring and neighboring countries in Europe. Meanwhile, about 100,000 U.S. military personnel are stationed in Europe.

Contrary to the massive US aid to Europe, Germany’s own military spending will remain below NATO’s collective target of at least 2% of GDP. For context, Germany has not achieved this goal since the hammer and sickle flew over the Kremlin. A string of promises to break that frugal record earlier this year have fallen through.

While the German government has ignored the coercive underbelly of China’s economic diplomacy, U.S. law enforcement is working to contain it. Last week, Attorney General Merrick Garland announced charges against 13 suspected Chinese spies. They have been charged with a range of crimes, from seeking to recruit U.S. government officials to harassing former Chinese residents.

These now-public cases are just the tip of the iceberg. Earlier this year, FBI Director Christopher Wray revealed that “no country poses a broader and more serious threat to our innovation, our ideas, and our economic security than China.” According to Wray’s On average, the bureau opens an investigation into Chinese espionage every 12 hours. But the US is not the only target. The scale of Chinese espionage in Europe today is described as “on par with the Russians”.

Still, parallel risks entangled with the Russian and Chinese economies appear to be lost on the leaders of Europe’s largest economies. While the U.S. competes with Beijing while supporting European security, open support for closer economic ties with China puts Berlin in a position of betrayal.

Building a cohesive and mutually beneficial relationship among NATO members is a top priority for the United States and Europe. But Germany cannot have its military alliance and eat it too.

Oliver McPherson-Smith is a research fellow at the Hoover Institution at Stanford University.

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