Germany's Strategic Shift: Rethinking Trade Relations with China

Germany appoints an expert commission to address trade policy towards China, aiming to reduce dependency on critical imports. This move follows China's export restrictions and underscores the vulnerability witnessed by German industries. The strategy focuses on risk management and reducing reliance on China as a trading partner.

Germany has taken a significant step to reassess its trade policy with China by appointing an expert commission, reflecting the urgency to 'de-risk' its economy. This decision comes in the wake of China's rare earth export restrictions, exposing the fragility of Germany's industrial dependencies.

The new committee, composed of industry leaders and policy think tanks, is tasked with delivering actionable strategies to the government. Their goal is to draft laws targeting energy, raw material imports, and investments by China in critical German infrastructure. This creation of the commission precedes Finance Minister Lars Klingbeil's trip to China, where he will advocate for the EU's stance on trade issues.

Germany's heightened focus on risk management aligns with the broader European strategy to see China as both a partner and a rival. Despite past agreements pushing for less dependency, little progress has been made. The government now faces challenge as it juggles domestic reforms with the pressing need to rethink its largest trading partnership.

(With inputs from agencies.)