Germany’s trade relations with other countries in Asia are to be expanded in order to avoid one-sided dependencies on China. During their trip to Asia, Chancellor Scholz and Economics Minister Habeck want to set counterpoints against China and Russia and win new partners.
It is Chancellor Scholz’s longest journey since he took office eleven months ago. For four days he is traveling in Vietnam, Singapore and Indonesia. The message: Asia is much more than just China. But his first station is also about Russia.
Scholz has called on Vietnam to clearly oppose Russia’s war of aggression against Ukraine. He would like the government in Hanoi to take a “clear position” on this issue, said Scholz on Sunday after talks with Prime Minister Pham Minh Chinh in the Vietnamese capital. “The Russian war of aggression is a breach of international law with a dangerous precedent effect. Small countries can no longer be safe from the behavior of their larger, more powerful neighbors.”
The Chancellor also said this with a view to China, which is fighting over islands, reefs and sea areas in the South China Sea with Vietnam, Malaysia, Brunei and the Philippines. Beijing also claims territory there that is more than 800 kilometers away – although the International Arbitration Court in The Hague in 2016 dismissed Chinese claims as unlawful. “Even in the Indo-Pacific region, the strength of the law must apply, not the law of the strongest,” emphasized Scholz. A clear message in the direction of Beijing, where the Chancellor visited just over a week ago.
With his four-day trip to Southeast Asia – the longest of his tenure – he now wants to set a counterpoint. The message: Asia is much more than China. The goal: to reduce the dependence of the German economy on China and broaden the partnerships with Asian countries.
Unlike his predecessors, Scholz was the first Asian country to visit the democratic G7 partner Japan – and only half a year later the autocratic China. Government consultations were held in Berlin in May with the second economically strongest country in Asia – India. So now Vietnam. The country with almost 100 million inhabitants is one of the fastest growing economies in the world and is Germany’s most important trading partner in Southeast Asia.
As a result of the Russian war of aggression against Ukraine, Germany must prepare sales markets, supply chains, sources of raw materials and production sites, Scholz emphasized in Hanoi. “The cooperation with Vietnam plays a very, very central role here.”
However, the communist-led country continues to maintain close ties with Moscow. Russia is Vietnam’s main arms supplier. Both countries are also cooperating in the development of gas and oil fields off the Vietnamese coast. In addition, there are more than 150 investment projects in Vietnam with the participation of Russian companies.
Against this background, Vietnam has not condemned the Russian war of aggression against Ukraine, unlike the vast majority of UN members, but has abstained from votes on it in the United Nations General Assembly. On his travels and in talks in Berlin, Scholz has repeatedly tried to change the minds of these countries – so far with moderate visible success.
For Scholz, the second day of the trip in Singapore will also be about the broader positioning of the German economy in Asia. Together with Economics Minister Robert Habeck (Greens), he will take part in an Asia-Pacific conference there, which is about deepening trade relations in the region. “We have to reorganize our trade policy,” Habeck demanded there on Saturday. “We need other countries, other partners.”
At the same time, Habeck emphasized that there could be no decoupling from China. The dependency on China is almost 100 percent in certain areas such as important raw materials, he told n-tv. “If China were to disappear as a sales market, it would not be manageable for some German industries.” For a long time, the low production costs were considered to be the “sole salvation”. In addition, China has thrown huge deposits of raw materials cheaply onto the market.
The South Asian markets outside of China, which developed very strongly, are now of great interest to the German economy. Habeck called for speedy talks about a free trade agreement between the EU and India. “The world is not waiting for Europe or Germany to get into trouble.”
