Germany will not repeat its mistakes with Russia in China and was already diversifying its trade, Chancellor Olaf Scholz said on Tuesday, as a major industrial player warned against damaging ties to the country's biggest trading partner.
"The mistake of dependence as with Russia will not happen again," he said at an economic forum organised by Sueddeutsche Zeitung, referring to Germany's decades-long reliance on Russian energy supplies.
His comments came after representatives of German industry reacted critically to a leaked draft of Berlin's new China strategy and called for more political support in diversifying trade and securing key raw materials from elsewhere.
A large German business with a strong presence in China said on Tuesday it agreed with the need for broader trade ties but feared the tone of the strategy would hurt its relationship with Chinese partners.
"The mistrust towards China and market participants like us is clear in every line of that text," the business representative, who declined to be named because of the sensitivity of the matter, said. "The framing is the problem."
The draft foreign ministry document advocates building stronger trade relations with other economies along with more controls on German trade with China, including 'stress tests' on raw material dependency and screenings for environmental and human rights implications of German investments.
"Stress tests would be another bureaucratic hurdle which only we would face, not our competitors from other countries. What's the point?" the business representative said. "Of course we want more open trade with China... but every world region has its problems."
China's foreign ministry warned Germany in a statement on Tuesday that erecting protectionist barriers could destabilise supply chains, stating that "politicising normal economic trade... is contrary to the principles of market economy."
Yet the German draft document points to disadvantages faced by European businesses in China including limited market access, mandatory joint venture rules, and forced technology transfer.
In an interview with German business daily Handelsblatt on Tuesday, Volkswagen's China chief Ralf Brandstaetter said the company was "not closing ourselves off to reality and adjusting our strategy... but that does not mean we cannot make use of the market opportunities China offers."
(Reporting by Riham Alkousaa and Victoria Waldersee, Writing by Rachel More, Editing by Miranda Murray and Tomasz Janowski)
