Hello from Hamburg,
“Decoupling!” replied the CEO of a globally operating medium-sized company when I asked him how he was positioning his company with regard to China. In concrete terms, “decoupling” means producing in China solely for the Chinese market and cutting off—or keeping to a minimum—supply and trade flows between China and the rest of the world. This is a response you hear time and again these days, tinged with uncertainty and skepticism—after all, China is the country to which Germany owes a good portion of its economic growth over the past decades. But countering this is an ever-growing list of complaints about China’s aggressive and nationalistic stance: industrial espionage, strict COVID-19 lockdowns, arbitrary government actions, hostile takeovers such as that of the German robot manufacturer Kuka or the acquisition of a stake in the Port of Hamburg, flooding the German electric vehicle market with Chinese brands, securing access to raw materials by infiltrating African and South American economies, China’s monopoly on rare earths, its conduct in Russia’s war of aggression, in Taiwan, and in the South China Sea—the former affection for what was once seen as the “extended workbench” of German industry has clearly cooled. With some resentment, we note that China is no longer the low-wage country it once was, but is catching up to the U.S. in high technology and artificial intelligence, is setting the global standard in the renewable energy sector, and that Chinese household appliances are no longer inferior in quality to ours—they’re just significantly cheaper. News reports about the slowdown in China’s economic growth, rising unemployment, and looming real estate bubbles are met with no small amount of schadenfreude.
I’m no expert on China, but I’m interested in the country. In the 2000s, I visited China several times a year and had the opportunity to observe debates between German and Chinese legal scholars on the protection of private property. I was surprised by the openness with which we were able to discuss these issues behind closed doors at a think tank closely aligned with the ruling Communist Party. I began learning Chinese and traveled around the country. I’ve been back there occasionally since then, and a lot has happened in the meantime. Chinese President Xi Jinping has had the term limits on his presidency lifted, making him ruler for life; he had his predecessor, Hu Jintao, escorted away in front of rolling cameras at the 20th National Congress of the Communist Party of China in October 2022; and he has restricted freedom of expression.
A book by economics professor Li Daokui, published in January, and an essay by Yuan Yang, the longtime Beijing correspondent for the *Financial Times*, published in April, offer further insights into China’s economic and political actions. According to these works, the humiliations the Chinese people endured—from the colonial Opium Wars through Japan’s war crimes during World War II—continue to shape the country to this day; even the cession of Hong Kong and Taiwan has not been fully overcome. Added to this were Mao’s grave policy blunders: his “Great Leap Forward” in the late 1950s triggered a mass famine, and the Cultural Revolution in the 1960s claimed millions more victims. The opening up of the economy in the mid-1980s then paved the way for China’s transition from poverty to a high-tech nation with the clear goal of earning the world’s respect. Yuan Yang tells her life story, from her birth into poverty in the countryside to growing up in Great Britain. In 2016, she returned to her native country as a correspondent, where a Communist Party ruled over an ultra-capitalist society. She left again in 2022, as foreign journalists were viewed with increasing suspicion by the state.
Today, China is a country of stark contrasts, with a significantly lower per capita income than in the United States. On the one hand, it plays a global role in financial matters and climate technology. On the other hand, China is a microcosm of the world’s social and environmental problems, ranging from extreme poverty in rural areas to the super-rich in the cities, and a middle class of about 400 million people who live in fear that their children will lose their social status. The whole system is balanced by a single-party state, which, however—as Li Daokui documents in his insightful and highly readable book—engages in controversial behind-the-scenes struggles to master the forces tearing the country apart and to prevent mass social unrest at all costs. China’s citizens would cede their civil liberties to the government as long as they felt well governed. As long as that is the case, they accept restrictions on freedom of expression, internet censorship, and surveillance of public spaces. Surrounded by 14 hotspots of unrest—some of them major—such as Afghanistan, Pakistan, and North Korea, China, according to Li Daokui, views itself as a vast experimental laboratory striving to learn from mistakes like the one-child policy. It is so preoccupied with its internal challenges that it has no desire for military or ideological expansion. China demands respect and reacts sensitively when confronted with a wagging finger.
Of course, China’s values and view of humanity are incompatible with our own; China’s indifferent stance toward Russian aggression in Ukraine and toward Tibet is hard to bear, and industrial espionage is unacceptable. But could it be that much of the widespread anger toward China is an expression of insecurity about Europe’s declining competitiveness? Fear of losing the headquarters of German companies—which we can no longer really afford to keep? Lecturing, isolationism, and arrogance are always signs of deep-seated insecurity. But instead of stamping our feet like a defiant child, perhaps we should view China’s changing role as food for thought regarding our own major challenges. Instead of complaining about the flood of Chinese cars, let’s ask ourselves: How did this come to be, and what can we learn from one another in a challenging partnership? Listening instead of lecturing, and seeking to understand without neglecting our own positions. Because without each other, both sides will lose, as numerous studies show. There is much to be said for a moderate decoupling from China, not least because it forces us to reposition and strengthen ourselves. Complete decoupling is unrealistic—and not viable for the future.
