A crack in the transatlantic wall

Olaf Scholz's whirlwind visit to China caused thunderstorms in Germany and in the world order.

The Coalition Agreement, signed by Scholz to govern, foresaw a critical retreat in bilateral Germany/China relations. 

Indeed, the agreement provided for the continuation of bilateral cooperation, but only "to the extent possible" and strictly based "on the protection of human rights and international law." Furthermore, the agreed political text also demanded the non-implementation of the investment agreement between the European Union and China, advocated by Merkel in 2020, and mentioned the need to reduce dependence on Beijing.

Finally, the text made political considerations about Chinese territorial conflicts, especially with Taiwan, noting that such conflicts had to be resolved through "agreements between the Parties" and based on international law. Consider that, for Beijing, Taiwan is China. End of story.

In other words, the Coalition Agreement, following guidelines issued by the US, recommended that Germany, as well as the rest of Europe, drastically reduce its relations with China, in addition to, of course, dismantling its energy dependence on Russia.

However, these political and ideological concessions to the new Cold War imposed by the US run up against an actor that does not negotiate: reality. 

Approximately 40% of all German cars are sold in China. In the case of Volkswagen, that number is 50%. In other words, without China, Germany's main automotive industry would collapse. 

BASF, the world's largest chemical company, which invested 10 billion euros in a plant in China, predicts that soon two-thirds of its revenue will come from that country.

Furthermore, around 50% of all industrial companies in Germany are heavily dependent on intermediate goods that come from China. In other words, without China, German industry and the entire German economy would collapse. 

Trade (imports + exports) with China is already Germany's main source of income and is growing year after year. Trade with the US comes in third place. Thus, Germany is not solely dependent on Russian gas. It also depends on its commercial and economic relations with China.

Therefore, Scholz went to meet with Xi Jinping accompanied by 12 of the top CEOs in the German economy. Although he denied it, Scholz, pressured by reality and the crisis, went to Beijing ignoring the Coalition Agreement and Biden's "recommendations".

Ultimately, it's about repositioning relations between China and Germany, albeit in a somewhat disguised way, on the natural course of "business as usual," which, internally, breaks with the Coalition Agreement and, externally, creates a geopolitical rift in the transatlantic alliance between the US and Europe.

But the essential question does not concern the present of Germany and Europe. It concerns the future.

Who could replace China as the world's leading economic engine and major investor, with its infrastructure projects?  

The US, certainly, is no longer in a position to do so. The European Union, weakened by Brexit and the crisis, is no longer able to either. 

It therefore seems highly unlikely that Germany and Europe will be able to decouple with China. The cost would be prohibitive. The future belongs to those who adopt a universalist and pragmatic foreign policy.

It should be noted that many German companies, particularly in the automotive industry, are transferring their research and innovation sectors to China. Therefore, Xi Jinping mentioned during the visit the need for Germans and Chinese to cooperate technologically in strategic areas such as artificial intelligence, digitalization, and clean energy. 

China has ceased to be a "low-cost factory" that assembled, produced, and exported goods for large American, European, Japanese, etc. companies. Today, China is already a superpower with a complex and sophisticated economy that successfully competes with the US, Europe, and Japan in high-tech sectors. It is already the world's leading economy measured in PPP (Public-Private Partnership) and is rapidly moving towards replacing the US as the world's leading economy measured in dollars. 

Furthermore, it is the country that invests the most in sectors that are strategic for the economy of the future, such as clean and renewable energy, for example.

This new configuration of the Chinese and global economy creates concrete and coercive facts that clash head-on with the geopolitical imperatives that the US wants to impose not only on Germany and Europe, but on the world. 

In this century, the world order has changed radically. It is a much more multipolar and economically decentralized world, which no longer fits into the... Pax americana.

Therefore, pragmatic cooperation with China, Russia, India, Brazil, and all emerging economies is necessary so that the crisis can be overcome and the world can solve its serious problems, such as hunger, inequality, climate change, etc.

Despite fears regarding dependence on China and the unrealistic and archaic ideological pressures from the US for the world to regress to what it was in the last century, Scholz and other European leaders seem to know that it is pointless to fight the new global reality, compromising their development and sacrificing their populations.

The crack tends to widen.