New Delhi: German Chancellor Olaf Scholz sent an indirect message to China when he said Friday that countries, including his, needed to avoid “one-sided dependencies” on other nations, particularly in strategic areas like raw material and technology.
As Germany tries to balance its reliance on China in goods trade with the European Union’s steady decoupling from Beijing, Scholz emphasised that countries need to adopt a different approach–“being open without being naive”.
Speaking at the Asia Pacific Conference of German Business in New Delhi, Scholz said, “Yes, we must avoid one-sided dependencies, particularly in areas of strategic importance–critical raw materials and certain technologies. But for us, de-risking does not mean less trade, but diversification.”
Scholz took another jab at Beijing at the gathering, saying the now “industrial giant” should give up the special treatment it enjoys as a “developing nation” from the World Trade Organisation (WTO).
“A crucial institution when it comes to increasing global prosperity is the World Trade Organisation (WTO). All of us are better off when its principles are respected again and we do not lash out at each other on tariffs … on one hand, this means restoring the legal system for settling trade disputes, on the other hand, China, now an industrial giant, should give up the special treatment it has received as a developing country,” the German chancellor said.
Scholz and several German cabinet ministers are in New Delhi for the next round of intergovernmental consultations, held Friday. The German chancellor will fly to Goa Saturday before returning to his country.
Germany looks at India as EU moves away from China
His comments carry significant weight as China was Germany’s largest trading partner of goods in 2023, with trade crossing EUR 250 billion (roughly $270 billion). The German economy relies on China for chemicals and other commodities, even as the EU has slowly taken a stronger position against Beijing economically.
The chancellor visited China earlier this year with a large business delegation, among them members of its vaunted automobile sector. In this context, Scholz’s visit to India is even more important as the country wishes to expand defence, energy and economic ties as revealed in a focus paper adopted last week.
A part of Germany’s pivot to India is deeper cooperation on arms exports. The country’s ThyssenKrupp Marine Systems (TKMS) is one of two European firms in the running for the P75 India or the P75 (I) submarine contract, as reported by ThePrint earlier.
As a part of its commitment to deepen defence ties, two German ships, the frigate Baden-Württemberg and a supply ship Frankfurt am Main, will be making a port call at Goa Saturday–an event which Scholz will attend.
Russia & Indian labour mobility
Berlin’s geo-strategic push comes as war continues in Europe between Russia and Ukraine. India has deepened its economic ties with Russia, especially through the purchase of oil, while Germany and the EU have taken strong steps to sanction Moscow’s economic activity across the continent.
Speaking on the Russia-Ukraine war, Scholz said Friday, “If Russia was to succeed with its illegal brutal war against Ukraine, there would be repercussions far beyond Europe’s borders. Such an outcome would endanger global security and prosperity as a whole.”
Germany has been the second largest economic aid partner of Ukraine since the war began in 2022, with close to EUR 15 billion in both military and humanitarian assistance. The sum is dwarfed by the US, which has given EUR 85 billion, according to the Kiel Institute for the World Economy.
The new focus paper, adopted by the German cabinet last week, reveals the country’s interest in increasing defence trade ties with India to wean it off from Russia.
For Berlin, as an ageing society, labour mobility is also a key area of interest.
“Only a few days ago, the German government agreed on a strategy to attract skilled Indian employees to Germany … last year alone the number of Indians working in Germany grew by 23,000. Their talent is a welcome addition to our labour market,” Scholz said.
As a part of this push, the German government has set out an “India Skilled Labour Strategy”, which will be presented to the Indian government during the intergovernmental consultations, to help promote talent from the South Asian country to work in Germany.
(Edited by Tikli Basu)
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