Germany and the New Silk Road: Between Cooperation and Confrontation

Hardly any country in Europe is as deeply entangled in the geoeconomic tension field of China's New Silk Road (BRI) as Germany.

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<div class="sf-perspective"> <h3>SwissForecast Perspective</h3> <p>Germany as the EU's largest construction materials market is directly affected: Turkish steel imports via BRI corridors, Chinese investments in European ports, and supply chain de-risking are fundamentally changing the procurement landscape. "Change through trade" has failed — the question now: how expensive will diversification be?</p> </div> <ul> <li>Economic Interdependence as Dilemma: Germany finds itself in a deep dilemma. As an export nation, the German economy is heavily dependent on China, which is both the most important trading partner and a systemic rival. This conflict shapes Germany's attitude toward the Belt and Road Initiative (BRI).</li> <li>Official Restraint, Factual Participation: Officially, Germany has never joined the BRI and instead emphasizes European solutions. In fact, however, numerous German companies participate in BRI projects, and logistics hubs like the Port of Duisburg are central anchor points of the land route in Europe.</li> </ul> <div class="sf-note"> <p>From the perspective of de-globalization: as global supply chains fragment, transport costs rise, local production becomes more competitive, and European construction material prices increase due to higher production costs. Germany's dependence on Asian steel is particularly vulnerable.</p> </div> <ul> <li>Erosion of China Euphoria: The initial euphoria about the economic opportunities of the BRI has given way to a sober and increasingly critical risk assessment. Concerns about unfair competition, technology theft, and growing political influence from Beijing are growing in business and politics.</li> </ul> <div class="sf-data"> <p><strong>Duisburg: Europe's BRI hub</strong></p> <p>The port of Duisburg positioned itself as the central European endpoint of transcontinental freight train connections from China. Symbol of the "win-win" narrative — and simultaneously a strategic dependency.</p> </div> <ul> <li>Recommendation for Action: Germany must readjust its China strategy. This requires a clear identification of risks, a reduction of one-sided dependencies ("de-risking"), and stronger commitment to a common, robust European China policy based on the principles of reciprocity and the safeguarding of strategic interests.</li> </ul> <div class="sf-note"> <p>From the perspective of great power rivalry: the US will attempt to prevent any peer competitor — including through pressure on allies like Germany. Materials with concentrated production in geopolitical tension zones receive a risk premium.</p> </div> <p>Hardly any country in Europe is as deeply entangled in the geoeconomic tension field of China's New Silk Road (BRI) as Germany. As one of the world's leading export nations and with an industry closely interwoven with the Chinese market, Germany stands at the center of the debate about the opportunities and risks of the BRI. While German business sees the potential for new markets and optimized supply chains, politics looks with growing concern at Beijing's geopolitical ambitions and the strategic dependencies arising from the initiative. This article analyzes Germany's ambivalent attitude toward the BRI, illuminates the discrepancy between political rhetoric and economic reality, and examines how Germany attempts to navigate its interests between cooperation and systemic rivalry with China.</p> <h2>Historical and Contextual Background</h2> <p>German-Chinese relations were long based on the principle of "change through trade." German politics and business assumed that close economic interdependence would open China not only economically but also politically. Against this background, the Belt and Road Initiative announced by Xi Jinping in 2013 was initially seen predominantly positively as an opportunity for German export industry. Companies like Siemens, Volkswagen, and BASF hoped for new contracts in infrastructure development and better access to the Chinese market. The Port of Duisburg successfully positioned itself as the central European endpoint of transcontinental freight train connections from China and became a symbol of the supposed win-win situation. But with China's increasingly assertive foreign policy under Xi Jinping and the recognition that the BRI is also an instrument for enforcing geopolitical interests, a rethinking began in Germany.</p> <h2>Analysis of the Current Situation: Germany's Ambivalent Role</h2> <p>Germany's attitude toward the BRI is characterized by deep ambivalence. While the federal government has always avoided an official declaration of accession to the BRI and instead insists on a common European response, German business has long been an integral part of the initiative.</p> <p>This discrepancy between political rhetoric and economic action makes Germany vulnerable and complicates a coherent national and European strategy. The debate about the participation of the Chinese state-owned company COSCO in the Port of Hamburg has exemplarily exposed this conflict.</p> <h2>Actor Analysis</h2> <ul> <li>Federal Government: A divided picture. While the Foreign Office led by the Greens takes a values-based and more critical stance toward China, the Chancellery led by the SPD often emphasizes the necessity of economic cooperation. The FDP in the Finance Ministry warns against naive investment decisions.</li> <li>German Industry (BDI, VDA, VDMA): The major industrial associations are also divided. On one hand, they warn against unfair competitive conditions and pressure for technology transfer in China. On the other hand, they fear losing the Chinese market, which is vital for many sectors (especially the automotive industry).</li> <li>Logistics and Infrastructure Actors (e.g., Port of Duisburg): Have strongly benefited from the BRI and see themselves as successful models of cooperation. They warn against overly confrontational policies that could endanger their business models.</li> <li>USA and EU Partners: The USA urges Germany to take a harder line toward China. Within the EU too, pressure is growing, especially from France and Eastern European states, to pursue a more unified and robust European China policy.</li> </ul> <h2>Scenarios and Forecasts</h2> <ul> <li>Scenario 1: "Business as Usual" with Cosmetic Corrections: Germany attempts to continue the balancing act between economic interests and political concerns. Dependence on China remains high, and Germany loses strategic influence in Europe.</li> <li>Scenario 2: Successful "De-Risking": Germany succeeds in a joint European effort to systematically reduce its dependencies on China, open new markets, and strengthen its technological sovereignty. The EU appears more united and self-confident toward China.</li> <li>Scenario 3: Transatlantic Confrontation: US pressure leads to a harder German line toward China. This leads to Chinese countermeasures and significantly harms the German economy without a genuine European alternative being built.</li> </ul> <h2>Recommendations for Action</h2> <p>Implement National "De-Risking" Strategy: The diversification of supply chains and sales markets outlined in the China strategy must be consistently backed up with concrete measures and incentives for business.</p> <p>Strengthen European Unity: Germany must use its role as a leading power in Europe to advance a truly common and robust EU-China policy. National solo efforts (like chancellor trips to Beijing) are counterproductive.</p> <p>Demand Reciprocity: Access to the European market for Chinese companies must be tied to the condition that German and European companies find the same fair competitive conditions in China.</p> <p>Invest in Future Viability: Germany and the EU must invest massively in their own technological capabilities, in modernizing infrastructure, and in training skilled workers to compete globally.</p> <h2>Conclusion</h2> <p>Germany's handling of the New Silk Road is a mirror of its broader China policy: torn between greed for economic opportunities and fear of strategic risks. The time of naive China euphoria is over. The Federal Republic faces the enormous task of reducing its one-sided dependencies without cutting vital economic relations. This can only succeed if Germany no longer sees its role as a solitary trading nation, but as a shaping force at the center of a strong and sovereign Europe. The way Germany masters this challenge will decide not only the future of its own prosperity but also Europe's geopolitical capacity to act in the 21st century.</p> <div class="sf-perspective"> <h3>Procurement Takeaway</h3> <p>For procurement: "de-risking" does not mean China exclusion, but diversification. Anyone sourcing >30% of a building material from a single geopolitical sphere should identify alternative suppliers — even if they are more expensive in the short term.</p> </div>

Published

2025-01-05