Decoupling not a viable or appealing proposition: China Daily editorial

While the German government's guarantee of investment to enterprises investing in China will decrease, its investment guarantee conditions for other developing and emerging market economies will be improved, according to an "exclusive" report by the German business newspaper Handelsblatt based on a document of the German Federal Ministry for Economic Affairs and Climate Action.

That is the way Germany hopes to make its economy "less dependent on China", Handelsblatt quoted Vice-Chancellor and Economic Minister Robert Habeck as saying. Such political maneuvers are likely to do little to discourage enterprises from investing in China.

Since he took office in December 2021, Habeck has kept cutting the German government's guarantee for investments in China, the total amount of which reached around €5 billion ($5.48 billion) in June 2023, according to a Spiegel report. Only nine applications for state guarantees were approved in 2022, compared with 37 in 2013.

Yet in the first half of 2023, German direct foreign investment in China reached €10.1 billion, up 16.4 percent year-on-year. So German companies are paying little heed to their politically motivated urgings, as they cannot ignore China on their business map.

China's stable growth in the post-pandemic world, especially compared with the recessions and other problems plaguing the traditional economic powerhouses of Europe and North America, makes it a rational choice for investment.

China's GDP surged 5.2 percent in the first three quarters of this year compared with the same period of last year. Confident in China's economic development prospects and that the country will continue to open up, German business leaders are willing to increase investment in China, expand their presence in the Chinese market, and further deepen Sino-German cooperation in responding to climate change, enhancing research and development capabilities, and promoting digital transformation.

At a symposium attended by Premier Li Qiang in Berlin in June, representatives of many major German companies, including Siemens, Volkswagen, Mercedes-Benz, Schaeffler and BASF, said they look forward to continued and in-depth cooperation with China. For these companies, "decoupling" from China is not a workable proposition.

Clearly, the German business community is more clear-eyed than some German politicians, who carry out de-Sinicization campaigns under the cover of "de-risking", as they recognize that continued and in-depth cooperation with China is in the best interests of their country.