Strategic Rethinking in Berlin (I)

CDU-affiliated Konrad Adenauer Foundation outlines options to escalate confrontation with China, but does not rule out “considerable damage” to German industry.

BEIJING/BERLIN/BRUSSELS (Own report) – Berlin is considering an intensification of its confrontational policy toward the People's Republic of China. This is apparent in a strategy paper recently presented by the CDU-affiliated Konrad Adenauer Foundation. The proposals in the paper include an intensified interference in the domestic affairs of China, “public campaigns,” accusing Beijing of “disinformation and propaganda,” as well as attempts in Africa to alienate China, as a cooperation partner. At the same time, the “resilience” of the domestic population must be strengthened – for example, with “a strategic media and information policy in Germany and the EU.” To weaken the People’s Republic’s position in the global economy, the CDU’s foundation suggests that the globally anchored WTO be replaced by a new alliance merging the G7 with the OECD (“WTO of the West”). The foundation points out, however, that Chinese resistance and massive damage to German enterprises are to be expected – at a time when Germany’s economy is already beginning to suffer heavily under the war of sanctions against Russia.

Interference in China

In its current strategy paper, the CDU-affiliated Konrad Adenauer Foundation contemplates an intensification of the confrontational policy against the People's Republic of China. Measures aimed at provoking unrest within the People’s Republic are considered a possibility by the foundation. For example, “representatives of the EU and its member countries could coordinate more closely in Hong Kong” to side with the opposition in the South Chinese metropolis, the foundation suggests.[1] Germany, in addition, could contact and agitate “targeted Chinese groups” via “social media.” Last but not least, the foundation mentions the option of positioning Taipei more strongly in opposition to Beijing, thereby torpedoing Taiwan’s peaceful reunification with the Chinese mainland, which is sought not only by Beijing, but also by strong forces in Taipei – the Kuomintang – as well. These kinds of activities have been on the rise in Germany and the EU, since the USA, back in the fall of 2021, declared the diplomatic upgrading of Taiwan as its objective.[2] Late last year – in close coordination with the United States – Lithuania opened a “Taiwan Representation Office” in Vilnius, thereby deliberately violating the One China policy which the West also recognizes.[3] Just recently, the EU Parliament’s Vice President Nicola Beer, (FDP), so far, the highest ranking EU politician to visit Taipei, promoted the “comprehensive and strengthened partnership” with Taiwan, that had been passed by the EU parliament.[4]

“Strategic Media Policy”

Supplementing a possible intensification of confrontation, and with an eye on China’s eventual countermeasures, the Konrad Adenauer Foundation (KAF) also advocates strengthening “resilience” inside Germany. For example, Berlin could “work toward establishing a strategic media and information policy for Germany and the EU.” On the one hand, this should contribute to “strengthening cohesion within the EU,” and on the other, offensively “promote the model of the European economy and society.” “Public campaigns,” accusing China of “disinformation and propaganda are also possible,” KAF suggests. The range of information should be aimed also at schools and youth. With a similar objective Berlin and Brussels could also take on foreign countries – such as “the strategically most important EU candidates for accession and partner countries around the world.” On the one hand, hand this refers particularly to Serbia, which is cooperating to a growing extent with China and has considerably benefitted from this, for example in the battle against the Covid-19 pandemic.[5] On the other, this aims at the African nations, who, for years, have also intensified their cooperation with the People's Republic of China and are already unwilling to side with the West in the power struggle between the West and Russia. For years, western powers have been accusing China of making African countries dependent using an alleged debt trap. Of course, this has not caught on.

“WTO of the West”

The Konrad Adenauer Foundation also proposes measures in the fields of the global economic and technology policy. Thus, it is not only proposing, in general, that the G7 should “strategically expand its influence within multilateral organizations” – especially including those with economic clout. It also states that one “should at least prepare a WTO alternative, excluding China,” which tends in the direction of China’s economic isolation. There would be several ways to do this. One would be to merge the G7 with the OECD [6] forming a sort of “WTO of the West.” The G7 alone appears obsolete “in its current form,” given the fact that “its function of coordinating the most important economic powers” has, in the meantime, “been taken over by the G20.” Complementing the attempt to create a powerful western-led economic block, with the exclusion of the People's Republic of China, the foundation recommends that decisive measures be taken for promoting high-tech. In light of the immense importance technologies, such as 5G, robotics, or bio-technology have “quite a few are now speaking of the geo-technology policy epoch,” explains the strategy paper. In this domain, “Germany and Europe” should “better and more comprehensively position themselves,” for example with a “transatlantic technology alliance.” Berlin, Brussels and Washington are already working on this within the framework of the EU-US Trade and Technology Council (TTC).[7]

The Limits of the Euro

Furthermore, the Konrad Adenauer Foundation brings up the issue of the EU currency’s significance for global rivalries. “For an open national economy like Germany’s, oriented toward the international market,” to have its “own currency would be very important,” according to the strategy paper. However, “Germany and the EU’s ability to influence and shape economic politics” are “rapidly reaching their limits, because the euro’s international role is lagging far behind the EU’s real economic, and geo-economic significance.” Whereas the euro was “still the world’s most important payment currency in 2012,” by 2019, “international payments in euros were only at around 32 percent,” in comparison to about 42 percent in US dollars. The situation is more optimistic in relation to the “international issue of bonds and debt securities,” particularly “green bonds,” the latter of which were transacted at a good 42 percent “in euros” during the first semester of 2021, against only 27 percent in US dollars. Of course, the foundation admits that the euro zone is facing a number of “unsolved problems.” Just last week, Rudolf Minsch, chief economist of Economiesuisse, expressed the opinion that a new euro crisis “cannot be ruled out” in the near future. Moreover the European Central Bank’s interest rates hike came at the “absolutely last moment” to “to bring inflation under control.”[8] This hardly improves the chances for the euro.

Considerable Damage

Apart from this, the Konrad Adenauer Foundation points out that the intensification of a confrontational policy toward China carries significant risks. “Many German enterprises” depend “to a considerable extent on the Chinese market,” the strategy paper affirms. “Large investments in China” have been “significantly reinforced over the past few years.” “Many German enterprises (...) would risk considerable operational damage” from an escalation of the conflict with Beijing. In fact, some of Germany’s top enterprises, including those from the automotive industry, are already generating a third of their turnover in China. Some are already considering spinning off their China businesses, should they come under pressure – with grave consequences for the German economy. ( reported.[9]) The debate over an intensification of the confrontation with Beijing is being held at a time, when the economic war being waged against Russia has already led to serious slumps in German industry, threatening to plunge Germany into a recession. Whether the German economy will be able to survive the additional loss of its business with China, is unknown. Alongside the economic aspect, a significant escalation in military steps is also in discussion. will soon report.


[1] For these quotes and those that follow: Konrad-Adenauer-Stiftung: Das Ende der Naivität – Deutschland und die EU im globalen Wettbewerb zwischen den USA und China.

[2] See also  Der Konflikt um Taiwan (I) and Conflict over Taiwan (II).

[3] See also  Washingtons Prellbock and Washingtons Prellbock (II).

[4] Friederike Böge, Thomas Gutschker: „Es darf keinen 24. Februar in Asien geben“. Frankfurter Allgemeine Zeitung 20.07.2022.

[5] See also  Die Impfstoffdiplomatie der EU and "This is our Backyard!" (II).

[6] Der OECD gehören 38 Staaten an, darunter insbesondere die westlichen Industriestaaten.

[7] See also The Euro-Atlantic Tech Alliance.

[8] Chefökonom: „Eine Eurokrise ist leider nicht auszuschliessen“. und21.07.2022.

[9] See also The Business Foundation of German Industry (I) and The Business Foundation of German Industry (II).