German Vice Chancellor Lars Klingbeil has announced a tougher stance towards China, saying on Thursday that Germany would prioritize European production in strategically important sectors and push back against what he described as unfair trade practices.
"I called for a more robust course towards China weeks ago, and we are now implementing it. In strategically important areas, such as infrastructure or defence, we are relying on European production - local content," Klingbeil, who also serves as German finance minister, said in Berlin.
Germany wanted open trade, Klingbeil said, but it "will not accept that others do not play by the rules and destroy jobs and business models here with unfair means."
'We are aware of the dependencies'
Chancellor Friedrich Merz said his government was not concerned about a Chinese counter-reaction, for example a blockade of rare earths for the German economy.
"We are aware of the dependencies, but we are also aware of the mutual dependencies. The European Union, with 450 million consumers, is the largest sales market for very many countries in the world," Merz said.
Appeal to the European Union as well
Germany would face any fair competition, Merz said. But if unfair trade practices were used - such as overcapacity, subsidies or artificially suppressed currencies - then Germany must defend itself against that.
Tackling such practices was not Germany's task alone, he added. "That is a task we are also addressing together with the European Union," Merz said.
Jens Südekum, an adviser to Vice Chancellor Klingbeil, said the "harder line in foreign economic policy towards China" was important for the German economy.
"In strategic sectors there will also be local content clauses - 'buy European' - specifically to strengthen domestic value creation. It cannot be right that subsidies for the purchase of electric vehicles, for example, end up in Beijing - they should create jobs locally," Südekum said.
