Germany is a flashpoint in the US-China cold war

Merkel’s policy of “equidistance” between the U.S. and China threatens to fracture the alliance of democracies.

Second in a five-part series on countries at the center of the U.S.-China rivalry. Read part one here.

As goes Germany, so goes Europe — and that’s a real challenge for the U.S. During the Cold War, West Germany was America’s crucial European ally. Today, Berlin leads a European bloc that could cast a geopolitical swing vote in the U.S.-China rivalry.

Yet Chancellor Angela Merkel’s government is seeking strategic “equidistance” rather than strategic alignment. In doing so, she is creating a great deal of uncertainty about a free-world coalition the U.S. needs.

It is hard to overstate Germany’s strategic importance. Berlin is nowhere near Beijing, but in a U.S.-China standoff, Europe represents the largest remaining concentration of economic power, technological innovation, democratic values and military potential. Any U.S. strategy for blocking China’s influence in international bodies, resisting its economic coercion, or keeping the democracies dominant in technologies from artificial intelligence to 5G telecommunications, requires strong transatlantic cooperation.

Germany can unlock that cooperation, given its economic dominance within the European Union. That was one reason why Donald Trump’s often gratuitous antagonism toward Merkel seemed so self-defeating.

Yet Trump had no monopoly on damaging behavior. In December 2020, Merkel rushed through a Europe-China investment deal while also declining to bar Huawei from Germany’s 5G networks. Both were curious decisions given what Covid-19 had revealed about China’s willingness to wield aspects of economic interdependence — such as its production of key pharmaceuticals — as geopolitical weapons.

Both wrong-footed an incoming Biden administration that had planned to put democratic solidarity at the heart of its China strategy. And both revealed Berlin’s fundamental ambivalence about this rivalry.

German citizens may distrust China’s president, Xi Jinping, and deplore his human rights violations, but Volkswagen AG and other companies driving Germany’s export-oriented economy are addicted to the Chinese market. Merkel and other German officials remain faithful to the transatlantic alliance, but Trump — who cut his own trade deal with Beijing just over a year ago — has badly shaken their confidence in the future of U.S. leadership.

History also casts a shadow: For many Germans, it was not “peace through strength” but Ostpolitik (economic and cultural outreach to the East bloc) that won the Cold War. Hope that economic engagement might yet mellow Beijing persists in Berlin, even as it has been abandoned in Washington. Germany will not support the “building of blocs” by China or America, Merkel has announced: Europe will preserve its alliance with Washington while charting its own path with Beijing.

For critics, this posture manages to seem both hopelessly naive, in its aspiration to moderate an incorrigible regime, and depressingly cynical, in its outsourcing of the hard work of competition to the U.S. For Xi, Merkel’s stance presents quite the opportunity.

China’s Europe policy is purposeful and predatory. It seeks to use trade, technology transfer and strategic investment to power its leap to supremacy in key industries such as robotics, artificial intelligence and advanced computing. And while Europe won’t align with an autocratic China, Beijing can get a good-enough outcome simply by preventing it from being strong, cohesive and aligned decisively with the U.S.

This is the logic behind many Chinese initiatives. These range from cultivating less-prosperous countries in Eastern and Southern Europe — through loans, investment and other inducements — and using the resulting leverage to stifle complaints about Beijing’s domestic and foreign policies to appealing to European sensibilities by preaching — if rarely practicing — multilateralism and enlightened climate diplomacy.
It is why Xi leapt at the opportunity, even providing meaningless promises on improving Chinese labor practices, to seal the investment deal before Biden took office. The U.S. wants to activate Europe as an ally in its rivalry with China; Beijing wants to neutralize Europe.

Merkel’s stance thus does Biden few favors. It may not serve Europe’s long-term interests, either. Germany faces no military threat from China, and there are areas — privacy, technology standards, Internet regulation — where European and American preferences do diverge considerably. But neither Berlin nor Brussels will fare well if a country that is utterly opposed to the EU’s liberal values, and thinks about power in the zero-sum terms that organization is meant to transcend, is globally ascendant. This is what the European Commission recognized in calling China a “systemic rival,” but policy hasn’t consistently reflected that realization.

There are opportunities for deeper transatlantic collaboration on China. The EU’s new investment screening mechanism, meant to prevent China from controlling key companies in key industries, is partially modeled on the Committee on Foreign Investment in the United States. The North Atlantic Treaty Organization, under Secretary General Jens Stoltenberg, is increasingly focusing on China’s challenge. China, moreover, is simply not smooth enough to keep its European gambit going forever: Its trade practices, persecution of dissidents and minorities, and bullying of those who cross it will create occasions for concerted response.

Yet Merkel’s “no blocs” concept will still be an obstacle, and that concept, with its roots in German strategic culture, may persist after she leaves office later this year.

The U.S. should therefore play the long game in shaping Europe’s strategic calculus. It should support European countries that are more willing to accept friction with China, whether President Emmanuel Macron’s France (which blends a Gaullist independent streak with a fairly clear-eyed view of the threat), the U.K. (which has swung toward an anti-China line but is, unfortunately, now outside the EU), or the Czech leaders who have resisted Beijing on issues from Covid-19 to Taiwan. Executive and legislative branch officials should amplify the voices of Germany’s China skeptics, such as Norbert Roettgen, the head of the Bundestag’s foreign affairs committee, and companies disillusioned by their brushes with Beijing.

Washington can also emphasize issues, such as China’s efforts to suppress free speech within Europe, that resonate in democratic polities, while stressing that differences between the U.S. and Europe — on technology and other issues — are minor compared with the gulf separating the free world from an ambitious autocracy. It should remain agile, responding with new initiatives as Chinese behavior gradually reveals that its long-range purposes are inimical to those of Berlin and Brussels.

And it should balance a basic respect for diversity — not overreacting with anger, threats and sanctions every time Germany pursues policies at odds with American interests — while subtly making clear that the degree of cooperation the U.S. receives on its foremost security challenge will inevitably affect the quality of the transatlantic relationship over time.

The task isn’t entirely unlike the one the U.S. faced during the Cold War. The U.S. and its allies didn’t always march in lockstep against the Kremlin; it took patience, persistence and some occasional pressure to achieve the cooperation that produced victory. U.S. officials would surely like Germany and Europe to rally quickly to America’s side. In reality, uniting the free world against a new authoritarian rival will itself be a long, hard campaign.


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