Germany — burned by overrelying on Russian gas — now vows to end dependence on trade with China

Chinese President Xi Jinping (R) welcomes German Chancelor Olaf Scholz at the Grand Hall in Beijing on November 4, 2022.
German Chancelor Olaf Scholz and Chinese President Xi Jinping.Kay Nietfeld/AFP/Getty Images
  • German leaders said the country wants to move away from relying on trade with China.

  • Germany's dependence on Russian gas is sparking a rethink of Berlin's foreign policy.

  • China has been Germany's largest trading partner for six straight years, per official statistics.

Germany is rethinking it's foreign policy — it has now vowed to move away from its dependence on China for trade, after being burned by overreliance on Russia for gas.

"We are doing away with the failings of an energy and trade policy that has led us into one-sided dependence on Russia and China, in particular," Chancellor Olaf Scholz told the told the Bundestag, the lower house of Germany's parliament, Reuters reported.

Germany, an industrial powerhouse and Europe's biggest economy, is reliant on piped natural gas from Russia which accounts for 35% of the country's fuel imports. But Russia has halted natural-gas flows via a major pipeline, causing an energy crisis in Germany and beyond.

Europe's largest economy has since been diversifying away from Russian natural gas by importing liquefied natural gas from other countries and is racing to build more essential infrastructure to hasten the shift.

It has also learnt a lesson from its Russia policy.

"The mistake of dependence as with Russia will not happen again," Scholz said separately at a Tuesday forum organized by Sueddeutsche Zeitung media outlet, per Reuters.

On Tuesday, Robert Habeck, the country's economic minister, told a news conference in Paris that Berlin is planning to cut its dependence on China and will limit investment support for German companies doing business in China, the AFP reported. In particular, Berlin is working on a new trade policy with China to cut dependence on Chinese raw materials, batteries, and semiconductor chips, Reuters reported in September.

This could prove challenging for Scholz's administration, as China has been Germany's largest trading partner for six straight years, according to Berlin's statistics office.

In October, German businesses pushed back against an economy ministry proposal aimed at curbing investment into China, Reuters reported.

"We can only warn against Germany turning away from China," said Markus Jerger, head of businesss alliance Mittelstand Association told Reuters at the time.

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