This year will be an important year from a China policy point of view. The Chinese Communist Party will hold its 20th Party Congress and with it will likely confirm a third term for Xi Jinping as leader of the Communist party, the Chinese state and the Chinese military. The decisions taken in Beijing will have an impact on China’s relations with the EU and Germany in 2022 and beyond.

At the same time, the new German government will adapt its approach towards China:
As you all know the coalition agreement includes a considerable amount of language on China. It includes the need for a new, comprehensive China strategy that is embedded in a joint EU-China policy. What will this mean in practice for our relationship with China?

We are facing a rising China that is ever more self-confident and less willing to compromise in promoting its interests, and especially so vis-à-vis smaller states, for example Lithuania.
We are facing a China that openly promotes its authoritarian model of governance including in UN institutions, while arguing that its own political system is inherently superior to democracy.
At the same time China aims at placing its state-led economy at the top of global high-tech value chains and is determined to shape international norms, rules and standards.

What does that mean for us?

First, we will continue to seek cooperation between China and the EU and Germany. However, the partnership that we seek will be looked at strategically: Does it conform with our values? Is it in our interest? And, certainly not least of all: Does it yield results?
We want to cooperate with China, wherever this is possible based on international law and within the framework of the rules based international order.
More importantly, our bilateral cooperation is necessary to solve global challenges such as climate change. China is also indispensable if we are to have an effective global security policy.
Without China, we cannot implement the Paris and Glasgow agreements or ensure peace and stability on the Korean peninsula, to name two important examples.

Second, we are willing to engage in fair competition based on a level playing field. Chinese companies are becoming ever more competitive - also in sectors where German and European companies are traditionally leading - such as the automotive sector.
China is making headway in the development of new technologies such as artificial intelligence.
Not all of this is a result of unfair competition, but rules and practices bent in favour of Chinese companies play an important part.
We must therefore further step up efforts towards a level playing field. The EU is a leading power in global trade and investment. It can exert influence on China and should work on this with like-minded partners in the world.
We will continue to push for WTO reform. We need new and stricter rules on state subsidies. At the same time, we will weigh in at EU level on new trade policy instruments, such as the instrument on foreign subsidies, to increase our leverage against unfair economic practices in the long run.
And, crucially, we will work towards diversifying our economic relations in Asia and around the world including by promoting an active bilateral EU trade policy and the EU’s new connectivity strategy “Global Gateway”.

Third, we will be more proactive addressing fundamental disagreements, where the EU rightly labels China also as a systemic rival.
The coalition agreement flags important areas of disagreement with China. We will be sure to address them in our relations with China and to put a stronger emphasis on values and human rights in our China policy.

There is no doubt: In view of China’s growing assertiveness, this will be an arduous task. However: These disagreements with China touch the core of European values and interests – not addressing this now will cost us dearly in the long run.
Therefore, where China undermines democracy, human rights and the rules based international order, where it undermines EU unity and bullies smaller states by economic coercion to “behave appropriately” we will speak out against it.

During our first encounters with the Chinese leadership, we made clear that we want China as partner to solve important global issues, but also that we will openly address difficult topics such as the human rights situation in China.

Foreign Minister Baerbock made this clear last week in her video conference with the Chinese Foreign Minister.

As you can see, we will stick to the EU’s multi-facetted approach with its three dimensions: partnership, competition and systemic rivalry. Of course, the EU will be our most important point of reference, not only in China policy and not only in 2022.

So let me conclude: I am looking forward to the contributions by MERICS in this crucial year of our and the EU’s China policy.
Your advice and that of other stakeholders will be in even higher demand when the Federal Government will be elaborating its new China strategy. An outreach to all stakeholders – be it European, transatlantic or Asian Partners, be it companies, NGOs (human rights, climate) or think tanks working on and with CHN will be part of the preparation of the China Strategy.
Thank you for your attention!