Geopolitical conflicts and economic disruptions: Germany’s China policy under pressure

Abstract The European Union’s policy on China provided the foundation for Germany’s ‘Strategy on China’, published in 2023. By framing China as ‘partner, competitor, and systemic rival’, the EU’s 2019 policy signalled flexibility. However, Russia’s invasion of Ukraine and the attempt to weaponise energy imports in 2022 shifted the EU’s focus towards economic security and a ‘de-risking’ approach to China. Germany’s strategy revealed open dissension on two levels: within the ‘traffic light’ coalition government, and between government policy and the interests of German business. Business representatives, pointing to a weakening domestic economy and structural challenges in major industries, questioned the de-risking approach. This internal dissent hindered the development of a consistent China policy and obstructed effective responses to mounting economic and geopolitical challenges. Following the February 2025 election, a new coalition government was formed with the stated aim of reviving the domestic economy and pursuing a more assertive foreign policy. It announced a revision of the China strategy, continuing to follow the principle of de-risking. The first section of this paper examines the formation of Germany’s China strategy. The second section explores geopolitical and industrial factors. The third section analyses the response from German businesses. The fourth section discusses the current government’s approach to China.