China Is Merkel’s Biggest Failure in Office

Angela Merkel has made it clear that she will step down after Germany’s next general election in the fall of 2021. By then she will draw level with Chancellor Helmut Kohl’s 16-year reign, who entered the history books for paving the way to German reunification. Merkel wants to leave behind an equally impressive achievement in Germany’s relationship with China, which she has visited an unprecedented 12 times during her chancellorship—but the odds, and the actions of the Chinese Communist Party (CCP), are against her.

It has been widely reported that Merkel wanted to leave the political scene with a landmark European Union-China summit in Leipzig, where she had studied physics at the then-named Karl Marx University in the mid-1970s. Merkel had pinned her hopes on signing a historic investment treaty that would level the field for European business in China. It wasn’t meant to be. As a result of COVID-19, the gathering was reduced to a one-day virtual summit.

The televised press conference following the two-hour virtual summit provided remarkable insights into Merkel’s approach to China. In her six-minute statement, Merkel talked about Hong Kong, minorities, and human rights for a mere 10 seconds. The characteristically stoic chancellor was far more animated when talking about the improved chances to sell German wine and beer following the EU-China agreement on geographical indications, which took up half a minute of her statement.

There is a sense of déjà vu. In the fall of 1997, Kohl had been in power for 15 years. Pundits across the German political spectrum complained about a suffocating intellectual inertia that had beset the country’s politics and society after Kohl’s uninterrupted reign as German chancellor. Fast-forward to this fall and history is repeating itself. Merkel, also in her 15th year, appears to be suffering permanent adjournment of political change.

Not a day goes by without reports about the CCP’s genocide against the Uighurs. That should matter in a country where “never again” is a mainstream value. Hong Kong’s courageous democracy movement has been suppressed with the help of a draconian so-called national security law. Chinese President Xi Jinping has threatened liberal democratic Taiwan with military annexation. And despite clear evidence of the CCP’s authoritarian brutalities, Merkel is unwilling to make even cosmetic changes to Germany’s mercantilist approach to China.

The problem goes well beyond Merkel. In an interview with Politico in mid-July, German Economy Minister Peter Altmaier doubled down on Germany’s failed “change through trade” policy by saying, “I have always been convinced and I still believe that change can be achieved through trade.” To substantiate his claim, he referred to West Germany’s previous engagement approach toward Eastern Europe.

The fact that an economically faltering Soviet Union can hardly be compared with China’s turbocharged state-led crony capitalism didn’t seem to matter much to him. But since Altmaier was previously Merkel’s chief of staff, his view matters a lot. In the same interview, he also shrugged off criticism of German trade with an increasingly authoritarian China by stating, “We have trade relations with many regions across the globe, including in many cases countries that have a different understanding of civil rights than we have in Germany.”

Why it is taking so long for the German government to abandon Merkel’s failed China policy of change through trade? When it comes to China, the German government has largely engaged in foreign trade promotion. Academic scholarship on the subject matter suggests that in foreign trade promotion the German government has let the private sector take the lead, which explains the highly corporatist approach.

This makes foreign-policy change through legislative means much harder, as the German government has essentially outsourced its foreign policy to the private sector. Outsourcing foreign policy to the private sector has also meant that corporate propaganda has always loomed large in the German public discourse about China. To justify trade and investments with an authoritarian China, corporate lobbyists have for decades hyped the significance of the Chinese market for Germany’s traditionally export-oriented economy.

During their regular visits to China, senior German politicians including Kohl, former Chancellor Gerhard Schröder, and Merkel have provided the TV images for such one-sided narratives. By signing trade and investment deals during their visits to Beijing, they have created the impression that Germany heavily relies on the Chinese market. It is rather ironic that government statistics reveal that in 2018 China only ranked third (7.1 percent), after the United States (8.7 percent) and Europe (68.5 percent) in Germany’s overall exports. As is so often, the promise of a largely illusory Chinese market has outweighed the reality.

German media has often uncritically amplified such corporate propaganda. I recently discussed this problem with a German media professional. In this conversation, it became clear to me that groupthink contributed to this rather unfortunate practice among journalists. Instead of challenging dominant narratives, all too often journalists have uncritically added formulations such as “Germany’s biggest export market” to their China-related reports. As the previously mentioned government statistics show, Europe is by far Germany’s most significant export market.

Germany’s outdated China policy will only change if politicians and parliamentarians reassert the central role of the state and strengthen both democratic security and industrial policy. Didi Kirsten Tatlow of the German Council on Foreign Relations recently pointed out that “Europe can protect its interests by countering disinformation, auditing and diversifying supply chains, building trusted alliances, screening foreign investments, clearly labeling propaganda sources, cracking down on United Front activity, prohibiting Chinese tech and taking cybersecurity seriously.” Following such sound advice will require political will, which in today’s Berlin unfortunately is in short supply.

There is also a need to better regulate corporate lobbying. It is an open secret in Germany’s corporatist political economy that politics and industry are deeply intertwined. This makes it all the more important to create greater transparency and accountability, e.g., in the form of a lobby register at the German parliament. If conglomerates dictate German foreign policy toward China, the public has a right to know its authors.

Academics and journalists should play their part by breaking down both government and corporate propaganda that hypes the significance of China’s market for Germany’s export-oriented economy.

And finally, German citizens should take note of the totalitarian turn in Xi’s China and demand an end to Germany’s failed China policy of change through trade.