Germany is China’s First Target in Critical Battleground in Beijing’s Global Ambitions

WASHINGTON, D.C., Oct. 14, 2020 – China intends to leapfrog the world’s developed countries. To that end, Beijing’s “Made in China 2025” (MIC2025) plan outlines ambitions to achieve global manufacturing dominance. A new Foundation for Defense of Democracies report, “Made in Germany, Co-opted by China,” issued today documents Made in China 2025, its implications for Germany, and the role of Germany as a keystone in China’s European – and global – campaign.

The Chinese Communist Party’s (CCP’s) industrial planning apparatus, including MIC2025, targets Germany first as a source of technology and second as a partner through which to export Chinese-defined standards. Beijing also treats Germany as a competitor, one that China intends to overtake to lead today’s industrial revolution.

In “Made in Germany, Co-opted by China,” authors and FDD Senior Fellows Emily de la Bruyere and Nathan Picarsic of FDD’s Center on Economic and Financial Power (CEFP) write that China’s investment in German technology is not just about obtaining research and development. China also engages in Germany to proliferate technical standards as part of the PRC’s larger standardization strategy. China’s approach threatens to subvert Germany’s traditional industrial advantages.

“China focuses on fields in which Germany excels, including the automotive, machinery manufacturing, chemical, medicine, and electronics sectors as well as new energy and environmental technologies,” the authors write. “Made in China 2025 is the first installment of a three-part, 30-year effort to seize the ‘commanding heights’ of global manufacturing and win the ‘new industrial revolution.’”

China’s approach also threatens international security and norms. Made in China 2025 overlaps with China’s military-civilian fusion (MCF) strategy, a program that integrates military and civilian resources and actors in pursuit of comprehensive national power. National security-relevant research and development that China obtains from Germany is connected to the MCF program. Moreover, Chinese influence in in Germany – derived from investment, supply-chain integration, and standard-setting – grants Beijing leverage that could be used for coercive effects without need for military engagement. Germany’s role in the global order is such that this leverage also affects Europe and the world.

The authors warn that Beijing’s maneuvering in Germany has only accelerated amid the COVID-19 pandemic and will likely continue to ramp up after the global health crisis has abated.

The authors make three key policy recommendations meant to accelerate an allied U.S.-German response to the holistic competitive threat posed by Beijing:

• The U.S. and Germany must identify and combat disinformation, misinformation, and the malign leverage that Beijing claims by twisting narratives.
• The U.S. and Germany should jointly define a new toolkit of cooperative export restrictions and investment-review mechanisms tailored to China’s subversive bid. This includes an intelligence task force focused on Chinese investment in the European Union.
• The United States and Germany should use NATO’s tremendous potential as a coordinating mechanism. NATO is positioned to defend against MCF while defining a positive vision of multilateral security cooperation that imposes costs on Beijing.

To contact FDD media relations, please email [email protected].

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About FDD’s Center on Economic and Financial Power

FDD’s Center on Economic and Financial Power studies national economic security, with a focus on how the U.S. can leverage its economic and financial power to achieve its national security objectives.