Speaking at an event hosted by the German Council of Foreign Relations’ Action Group Zeitenwende during the Munich Security Conference, Lithuanian Foreign Minister Gabrielius Landsbergis, Estonian Foreign Minister Margus Tsahkna, and Latvian Foreign MinisterKrišjānis Kariņš, called on German and European businesses to redouble their efforts to find friendlier alternative markets to China.
Share
“If China gets its way in forming foreign policy for other countries to include its own red lines, we will lose our sovereignty,” Landsbergis told the event.
“Russia has shown us how the strategy of controlling authoritarians through economic ties doesn’t work,” said Tsahkna.
“We’re not yet comfortable enough in Europe with coming at this from a position of strength, also on trade,” added Kariņš.
Landbergis’s Lithuania was the first European Union state to adopt an Indo-Pacific Strategy and has seen its trade with Taiwan rise by over 50 percent since 2021. The opening of a Taiwanese representative office in Vilnius prompted Beijing to downgrade its diplomatic relationship with Lithuania.
Yet the Baltic Foreign Ministers urged other democratic countries, particularly allied nations within NATO and the EU to reduce their exposure to China as a precautionary measure, after Russia’s full-scale invasion of Ukraine in 2022 saw countries like Germany spend hundreds of billions to cushion the economic blow of rising energy costs and inflation.
“Being economically dependent on authoritarians like China and Russia looks cheap until someone starts getting aggressive. Thenwe see how expensive that dependence can really get and how vulnerable it actually makes us,” said Dr. Benjamin Tallis, Senior Research Fellow at the DGAP who moderated the event with the ministers. “Aligning the sources of our security and our prosperity, but finding alternative markets and trading more with our friends and allies is the smart move for stable economies, free societies, and secure countries. But businesses also need governments to step in and help them do that, by helping to forge better trade and economic ties with friendly, alternative markets. The Baltics understand this, and the rest of us should take notice.”
Germany, once depended on Russia for 55 percent of its gas, earning loud criticism from its allies. It has since stopped importing energy from Russia following its full-scale invasion of Ukraine in 2022.
However, as tensions increase between the United States and China over the Communist country’s increasingly aggressive stance to Taiwan, China remained Germany’s largest trade partner for goods in 2022. That year, German-Chinese trade volume amounted to about €300 billion, prompting fresh concerns about the scale of the exposure the world’s third-largest economy would have to China in the event of an invasion of Taiwan or war with the US.
“With our economic strength, we should be able to take a self-confident stand,” said Thomas Erndl, CSU, Deputy Chair of the German Bundestag’s Foreign Affairs Committee, who said the current government’s decision to let Chinese state-owned companies into the Port of Hamburg or into communications infrastructure on state rail Deutsche Bahn isn’t sending clear signals to German business on Chinese risk. “We need to be consistent in our communication with our companies on this.”
Business representatives with the Action Group Zeitenwende’s Business Sounding Board, including Britta Jacob, Senior Manager of Global Government Affairs with Bayer – said governments in Europe, including Germany, needed clearer direction from government on what de-risking means, as well as more action on helping German business to find alternative markets.
“We have to strategically use our friendly relations with likeminded countries,” Jacob said.
“Be stronger at home. That means completing our common market, and we need to be stronger abroad. That means getting more partners,” said Nikolas Kessels, Deputy Head of Foreign Trade Policy at BDI, the Federation of German Industries.
###End###
Are you interested in further analyses, or would you like an interview with another DGAP expert? Please reach out to presse@dgap.org; we will be happy to provide you with further information and interview partners.
