Germany's Dangerous Dance

While holding China's hand, Germany seduces the US

“Is Germany ready to play an active role in the boardrooms of its largest companies, deciding what they can do and how because of geopolitics?”

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When it comes to dealing with China, the US has been trying to move mountains. At the center of this gargantuan effort is to reorient the West, and much of the global economy, away from China, reversing decades of global integration that prioritized the Chinese economy.

While it has taken multiple administrations in Washington, and a strategic overhaul in US geostrategic thinking, where America’s new ideas (like de-risking) challenge America’s old ideas (like free flow of commerce), the US has (slowly) won most Western capitals over, from the EU to Japan to Australia. Of note, Australia has done a complete one-eighty when it comes to China, moving towards marrying China before the pandemic, to effectively divorcing China and realigning with the US in the post-pandemic world.

But, in the West, there remains one last holdout, a critical link, whose decisions carry tremendous weight: Germany.

For over two decades, Germany has been China’s biggest cheerleader in Europe, competing with France, Italy, and the UK to become the “gateway” through which Chinese capital, in the hundreds of billions of dollars, reached European economies - predominantly in Western Europe. For Germany, it can be argued, its geoeconomic outlook has been increasingly China-centric, including at home. And, because of Germany’s place, as the largest economy in Europe, Berlin’s momentum towards China has influenced the entire continent.