Germany is reportedly working on a new trade policy to reduce dependence on China, as economy minister says the country can't allow itself to be 'blackmailed'
- Germany is drafting a new trade policy to reduce dependence on China, according to Reuters.
- "We cannot allow ourselves to be blackmailed," German Economy Minister Robert Habeck said.
Germany is reportedly working on a new trade policy to reduce its dependence on raw materials and components from China.
Berlin will not refrain from criticizing China's human rights violations nor allow its protectionist policies to tip competition, Economy Minister Robert Habeck said in an interview with Reuters.
"We cannot allow ourselves to be blackmailed," he said.
Europe's top economy must look to new trading partners and regions as key sectors rely heavily on China, Habeck added.
"If [the Chinese market] were to close, which is not likely at the moment … we would have extreme sales problems," he said, noting that "there is no more naivety."
China is Germany's top trade partners, with overall trade volume climbing to 245 billion euros last year. A trade war between the two would be catastrophic, and cost Germany six times more than Brexit if they were to completely turn away from Chinese trade, according to a recent study from the Ifo Institute.
Germany's leaders have considered reducing its dependence on China for years, but began to set the wheels in motion earlier this month by drafting a new policy, Reuters originally reported, citing a person familiar with the matter.
Habeck confirmed the ministry was considering policy changes to protect competition in Germany, such as by auditing certain Chinese investments and infrastructure projects in Europe. Germany would also be more selective in its investments in China.
A source previously told Reuters that Germany was also considering reporting China to the World Trade Organization for unfair trading practices, which Habeck did not comment on.
China has also ramped up business with Russia since Moscow's invasion of Ukraine, while Germany and other European nations look to decrease their dependence on energy trade with Russia.