February 4, 2023

Raven Tribune

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Notification duty for companies: Habek’s ministry wants to strictly control business in China

Notification duty for companies
Habek’s ministry wants to strictly control business in China

The central economy ministry sees Beijing as a competitor rather than a partner. According to the ministry statement, German companies doing business with China should prepare for restrictions. Instead, they should open other sales markets.

The Economy Ministry plans detailed requirements for German companies doing business in China and excludes suppliers from authoritarian countries from critical infrastructure. The 104-page document, classified as confidential by the Ministry of Economic Affairs and made available to Reuters, also questioned the German government’s previous support for German companies in China. The November 24 “Domestic China Policy Guidelines” call for a significant reduction in dependence on China.

At least a complete cut-off from the biggest German trading partner is ruled out. Instead, German companies should be given additional assistance in doing business with other countries, for example through state export guarantees. The article by the Ministry of Economic Affairs, led by Robert Habeck, appears to be critical of Chancellor Olaf Scholes’ recent trip to Beijing with corporate bosses. As a recommendation for action, “basically (basically) questioning the political side of projects in China by high-level representatives of the central government on the Chinese side”. Support should only be granted if “a positive effect can be demonstrated for Germany as a business destination”.

Companies operating in China, in particular, are required to have detailed reporting obligations to the federal government about their business. “On this basis, it should also be checked whether routine self-imposed or, if necessary, mandatory stress tests should be carried out.” The reference scenario should be “simulation of loss of China business or supply from China”. The consequences for companies are unclear. In the case of critical technologies and infrastructure, the article proposes to exclude “suppliers of final, intermediate and primary products from autocratically governed third countries”. This also applies to providers from other countries who use similar products. IT components are an example.

Fear of annexation of Taiwan

In tenders for particularly important European projects, for example in the semiconductor sector, it should also be checked whether third country companies or certain components can be excluded. The ministry recommends a fresh review of investments by German companies in Chinese companies “belonging to security-related areas or the military-industrial complex or engaging in human rights abuses.”

China’s development is described as more complex. Human rights abuses and a more restrictive domestic policy subject have been mentioned. “The fact that relations with China are moving further in the direction of formal competition is evidenced not least by China’s pro-Russian approach to its war of aggression against Ukraine,” it said, referring to the previously mentioned triangle between Germany and the EU. , according to which China is a partner, competitor and competitor.

“China refuses to condemn Russia for its attack on Ukraine, blames the West for the war and is openly keeping the option of annexing Taiwan open,” the paper said. It is also pointed out that Chinese President Xi Jinping has indicated that he wants to annex Democratic Taiwan, which is seen as a breakaway province, in his lifetime. He also did not rule out the use of force. The authors point out that 2027, the 100th anniversary of the establishment of the People’s Liberation Army, is repeatedly mentioned as a key date. As a result of this development, the Ministry of Economy wants a partial settlement from China.

The Foreign Office also has a China strategy

Reason: “In a bilateral relationship characterized by growing institutional rivalry and rising geopolitical tensions, close economic ties and isolationist leanings with China pose growing risks to the political independence of Germany and the EU.” So the policy needs to be adjusted “timely and decisively”. China’s great importance as a sales market for many German industrial sectors and dependence on certain economic or technological areas is viewed critically.

Chinese technology is mentioned in the field of mobile communication. Germany could be threatened in the event of a conflict, which would “lead to the limitation of its political capacity”. There is a fundamental interest in economic exchange with China, however, “a comprehensive disengagement is not intended,” it added.

The Federal Foreign Office has already presented a China strategy characterized by a similarly critical view of the communist regime in Beijing. The documents of Foreign Minister Annalena Baerbach and Habeck have not yet been integrated into the central government. After all, while Chancellor Scholz openly supports diversification and efforts to become more independent from China, objections from the presidency are expected. However, recently, when the Chinese state shipping company Cosco entered an operational facility in the port of Hamburg, there were differences between the Prime Minister’s House and the Green and FDP-led sectors.

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