ZDF documentary on China policy concludes: Germany is vulnerable to blackmail

Right at the beginning, the documentary plays through a worst-case scenario: What if the Chinese conflict with Taiwan escalates? Should a conflict between China and Taiwan occur, it would result in a complete change in relations between Germany and China overnight. The USA would impose sanctions, to which the Middle Kingdom would react with export blockades. Furthermore, the Taiwan Strait is one of the world’s major trade routes. If it were to be cut off, supply bottlenecks and mass unemployment would be the result.

Germany is a leader in terms of dependency on China. In addition to pharmaceuticals, it primarily procures rare earths from there; import dependency stands at 90%. Federal Minister for Economic Affairs Robert Habeck analyzes what this means using the example of the Ukraine war. Gas dependency at that time was 55%, and the German economy only just managed to survive that. According to Habeck, it would not have made it at 90%. German dependency is also evident in semiconductor materials such as the metals gallium and germanium, which were subject to export controls in early August: 50% of gallium and 82% of germanium originate from China.

CDU Chairman Friedrich Merz summarizes the German status quo in the report with one sentence: “The German business model is finished.” In the past, this consisted of importing cheap preliminary products from China and cheap oil from Russia, while the USA paid for defense. China’s rise was largely ignored. For instance, the last production facility for gallium in Stade near Hamburg was closed in 2017 because China could produce it more cheaply. Today, the dependency on this production-critical semiconductor material is costing us dearly. Because semiconductors are, as Olaf Scholz calls them, the oil of the 21st century.

Is there a way out of dependency? The ZDF report shows very precisely how China has been securing its economic success for decades with low prices. This is where our government could step in and counteract this tactic with tariffs. Developing new supply chains is also a path, but be careful: the Chinese government reacts sensitively to so-called “de-risking.” Xi Jinping issues a veiled threat to the West when he says: “Those who view the development of other states as a threat and economic interdependencies as a risk do not live better and do not advance their own development.” Especially if Germany participates in sanctions, this could have unpleasant consequences. The Vice President of the Center for China and Globalization, Victor Gao, explains that regulated exports for essential goods are then to be expected. As an explicit example, he cites the export controls already introduced for gallium and germanium. China had completely halted the export of both metals in August.