Germany is said to be working on a new trade policy to reduce its dependence on China, as the economy minister says the country cannot be ‘sung’

Germany is reportedly working on a new trade policy to reduce its dependence on raw materials and components from China.

Berlin will not refrain from criticizing China’s human rights abuses or allow its protectionist policies to tip competition, Economy Minister Robert Habeck said in an interview with Reuters.

“We can’t afford to blackmail,” he said.

Europe’s leading economy must look to new trading partners and regions as key sectors depend heavily on China, Habeck added.

“Whether [the Chinese market] if we closed, which is unlikely at the moment, we would have extreme sales problems,” he said, noting that “there is no more naivety”.

China is Germany’s largest trading partner, with global trade volume climbing to 245 billion euros last year. A trade war between the two would be catastrophic, and cost Germany six times more than Brexit if they were to turn away from Chinese trade altogether, according to a recent study by the Ifo Institute.

German leaders have been planning to reduce their dependence on China for years, but started to put the wheels in motion earlier this month by drawing up a new policy, Reuters originally reported, citing a person familiar with the matter.

Habeck confirmed that the ministry was considering policy changes to protect competition in Germany, such as auditing certain Chinese investments and infrastructure projects in Europe. Germany would also be more selective in its investments in China.

A source previously told Reuters that Germany was also considering reporting China to the World Trade Organization for unfair trade practices, which Habeck did not comment on.

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