Germany’s De-risking Strategy from China and the Role of Information Transparency

Germany has recently released its long-awaited  “China strategy,” in which it illustrates the rationale behind Germany’s new approach to engaging with China. In a Mercator Institute for China Studies (MERICS)report, the strategy is described in terms of “ambitious language, ambiguous course.” Public response is largely mixed: on one hand, there’s China’s growing threat to human rights and the world order and, on the other, the economic impact of a worsening relationship with China. The 64-page paper is widely reported in the media as the product of compromise between politicians and business sectors. China’s approved investment in the Hamburg port terminal is known as precedent of such a compromise in German politics. Having said that, Germany’s China strategy’s political and economic implications remain to be seen.

As a key component of the policy narrative, Germany emphasizes “de-risking” as the main guiding principle to reduce its over-reliance on any one single country. But indeed, this narrative shouldn’t be anything new to us: we live in a world of uncertainty, from climate change to the war in Ukraine. Managing risk (including de-risking any crisis) is part of the very nature of modern society, as rightly put by German sociologist Ulrich Beck in his famous book published almost three decades ago. Needless to specify, every responsible government, no matter who is in power, which party, and what policy direction, should de-risk any possible crisis to reduce the chance of really bad things happening. So, the key questions we should ask now is not about the rhetorical device presented in the paper, but about the way forward: How does Germany put “de-risking” into action?

Risk is “the possibility of something bad happening at some time in the future,” according to the Oxford dictionary, and “de-risking” represents minimizing potential harm. But how can we precisely assess the potential harm? De-risking can’t be done without good risk assessment. Evidence-based knowledge is the key to understanding what real risk at stake and judging whether or not the concern is nothing more than paranoia. Knowledge building should serve as a prerequisite for de-risking strategy.

Access to quality and reliable information about China is therefore critical to the success of de-risking policy. But unfortunately, there have been a series of threats which are not conducive to Germany’s position to make such a risk assessment. Formulating a principled, multi-layer, and transparent engagement policy, I argue in this article, is the most vital part of the implementation of Germany’s China strategy.

German Blind Spots

It is not entirely new to us that German (and other western) media usually covers China in a narrow, if not stereotypical way. A decade ago, the Heinrich Böll Stiftung published a research study to analyze German media’s reporting style and identified that “over half of the contributions refer to China only in allegorical and stereotype-reinforcing form” and that “significant blind spots exist in the topic agendas of all media, as areas of such central importance to social transformation as social issues, education, science, and technology are almost completely disregarded.” In more recent research, despite an increase in diversity in media topics,a study reconfirms that German media still gives major attention to economic issues related to Germany. But the study also discovers a shift in media portrayal of China, it being ever more frequently described as a rival than a partner. This media framing basically echoes the  European Union’s position since March 2019, which considers China as “a partner for cooperation and negotiation, an economic competitor and a systemic rival.”

Dichotomy can be a cognitive trap. It can serve as a mental cue leading us to understand issues in black or white, but not multifaceted as we should in a complex world. Unfortunately, Germany’s public debate on China tends to fall into an oversimplified dichotomy. A couple of my German intellectual friends with extensive knowledge about China complain about this unhealthy public phenomenon. Despite remaining impartial, their insight is often judged to take polar extremes: either “panda-hugger” or “China-beater,” both of which are eye-catching but inaccurate in summarizing the complex socio-political relationship between Germany and China.

However, the news media should not be the key target of blame. Foreign correspondents in China are struggling to navigate countless hurdles when investigating their own stories on the ground. In  the Foreign Correspondent Club China’s annual reports, victims of assault and harassment, including many German correspondents, have been documented over years and the situation appears to have intensified. In March 2023, the International Federation of Journalists (IFJ) issued a  press release to request that the Chinese government “to respect freedom of information and to cease the persecution of independent and critical journalists.” This demonstrates frontline journalists’ difficulty in reporting a “real” China. The over-regulated media environment puts journalists at risk and discourages their access to first-hand material and local connection, while encouraging the practice of using second-hand information and interviewing a limited set of experts, which can ultimately reinforce existing stereotypes.

Chinese Non-transparency

Now let’s see from the other side. China has an infamously opaque government in comparison with many democratic societies. Knowing what exactly is happening inside the country is notoriously difficult. One of the most telling examples is the recent public disappearance and later stepping down of the Chinese foreign minister,  Mr. Qin Gang. His surprising departure is still a mystery. Another is the awkward press conference without a questions-and-answers session when  Chinese Premier Li Qiang concluded his Berlin visit in June 2023.

It is well known that China’s media system is vigorously regulated by the government. News media are virtually all state-linked and most foreign media are not allowed to publish news in China. Russian RT and Sputnik News are the few exceptions. Independent voices and dissent do not easily co-exist. Global NGO Reporters Without Borders ranks China as the second least free media in the world. On the Chinese Internet, political sensitive material can be swiftly removed and social media accounts posting different views with the authorities can be suddenly banned. A whole spectrum of topics can be classified as sensitive: not surprisingly, discussing the country’s leaders, China’s historical events, and foreign policy. When in “non-official” terms it is susceptible to content deletion. But even giving an alternative take on China’s economy, financial forecast, or social policy (like falling fertility rate or rising unemployment) can be subject to  censorship.

Censorship decisions and the process of content moderation are not transparent. Quality of basic statistical data, for example census or population figures, has been questioned by scholars and statisticians. Even after three years of pandemic, theWorld Health Organization still repeatedly requests China to share COVID-19 data for a better understanding of the origins of the disease. Recently, China’s National Bureau of Statistics  stopped releasing unemployment figures amid a skyrocketing number of Chinese young graduates who can't enter the workforce.

New regulations have been in place to restrict data access from the outside world and impose additional challenges to genuine data collection for foreign business and academics.  China’s latest anti-espionage law came into force on July 1, 2023, and the new law broadens the scope of the material associated with espionage to cover “all documents, data, materials and articles related to national security and interests” but does not give clear definition of the “national security and interests.”  Some business leaders in Europe and the United States are alarmed and have openly cast doubt on how to comply with the law. Moreover, the new cross-border data transfer legislation, which will be effective from September 1 this year, requires Chinese companies to conduct “security review” for exporting data outside China.  International financial firms in China are particularly concerned about whether sharing investment and portfolio information generated inside China with offshore colleagues is legally prohibited.

But the most worrying part is the future outlook of China’s information openness, which seems to be on a downward spiral. In March 2023, the State Council, led by the newly on-board Premier Li Qiang, revised the government’s work rules by removing the previous government’s mandate on “openness as the norm, non-disclosure as the exception.”  This signaled that China is becoming even less transparent and accessible in information sharing and data availability.

Meaningful Engagement with China

This has become a vicious cycle. Further restrictions widen the gap between reality and media perception. The misunderstanding and polarization give rise to heightening mistrust and a greater extent of regulation. Someone should take the initiative to break the toxic loop. Although the German worldview and democratic values are in stark contrast to the Chinese, Berlin has established a long-term partnership and deep economic relationship with China. It seems to be still in a better position to engage with Beijing than many other Western allies in the world. Things wouldn’t change overnight. No matter how hard it would be, both parties should continue to work out common ground and a set of principles as a framework for kicking off meaningful engagement. Information sharing and transparency should be the first step. Engagement should also be multi-layer. Despite the uncertainties associated with the foreign NGO law in China, Germany should liaise with China to facilitate direct engagement between both countries’ academia, journalists, private business, think-tanks, as well as civil society and ensure all parties feel secure and comfortable to express their views from their perspectives without restriction and negative consequences. While Germany has a consensus that decoupling is not a solution in the near term, meaningful exchange is built upon transparency. Trust building depends upon honesty. This should be the cornerstone of the future German-China engagement policy.