SNA (New York) — Germany, led by Social Democratic Party (SDP) Chancellor Olaf Scholz, considers China both an essential economic partner and a “systemic rival.” This seemingly contradictory stance has produced political fractures within the coalition government, but it is part of a pragmatic geopolitical strategy.

In late October, Scholz pushed through a controversial decision allowing Chinese Communist Party-affiliated shipping company COSCO to acquire 25% ownership of three terminals in Germany’s largest port, Hamburg. In doing so, he reportedly overruled the advice of some Cabinet members, fomenting the ire of his two coalition partners, in particular the Greens, who make up about a third of his government and hold a number of senior Cabinet posts.

Ricarda Lang, chair of the Green party, declared on Twitter, “I have no idea of why the chancellor wants to allow the sale of Hamburg port against the criticism of all the ministries involved.”

Katharina Droge, leader of the Green’s parliamentary bloc, added that the government had “learned nothing from our Russia policy of recent decades.” Droge was alluding to the view common in some circles that the behavior of the non-democratic regime in Beijing is closely analogous to that of Moscow.

The COSCO deal is part of a series of recent German overtures to Beijing. Last month, Scholz became to first European leader to visit China since Russia’s invasion of Ukraine. Accompanying the chancellor were about a dozen executives from some of Germany’s largest companies, such as Volkswagen, Deutsche Bank, and Siemens.

Given the confrontational climate of current Sino-Western relations, the timing of this major European leader arriving in Beijing, openly signaling a desire to do business, raised eyebrows both at home and abroad. This become doubly so after one of the executives, BASF chief Martin Brudermuller, publicly demanded an end to “China bashing” in the run up to the Beijing trip.

Reinhard Butikofer, a Green party member, went so far as to describe Scholz’s trip as “probably the most controversially debated visit in the country for the last fifty years.” Such criticism highlighted the divide on China policy within Germany’s ruling coalition.

This split opinion goes beyond public statements. Since joining with Scholz’s SDP in late 2021, the Greens have pursued a notably confrontational posture toward China.

Economic Affairs and Climate Action Minister Robert Habeck, a Green party lawmaker, announced in September that “the time for naivete towards China is over.” Instead, he proposed “diversifying” the German economy away from China and more careful scrutiny all of Chinese investments, not only in Germany, but across Europe.

Additionally, a leaked draft strategy from the German foreign ministry, headed by China hawk Annalena Baerbock, another Green party lawmaker, accused Beijing of “massive human rights violations” and warned of its ability to use economic leverage to influence other countries. Her strategy called for measures to “identify China-specific risks at an early stage” in German industries and included provisions for taking “remedial action.”

The hardline polices advocated by the leaders of the Greens stand in contrast to the priorities of the German chancellor.

In an op-ed for the Frankfurter Allgemeine Zeitung, later picked up by Politico EU, Scholz defended his position, declaring that “new centers of power are emerging in a multipolar world, and we aim to establish and expand partnerships with all of them.” Setting out his vision of an evolving global community, the chancellor justified his trade-oriented visit to China with the comment that “business as usual is no longer an option.” This choice of wording may have been an attempt to flip on its head a criticism aimed against his policy into his own favor.

At the same time, however, Scholz has made no protests about the more confrontational language coming from members of his own Cabinet, even when they have been out of tune with his own public message.

That said, Scholz has not been free of his own concerns about Beijing. In his op-ed, he spoke of the need to preserve the “rules-based international order” in regards to Taiwan. He also acknowledged that there had indeed been important lessons to be learned from Germany’s overreliance on Russian energy sources. Scholz says that he aims to “dismantle one-sided dependencies” in trade with China.

Indeed, at the same time as the Hamburg port deal was approved, Berlin blocked the takeover of a computer chip plant in Dortmund by China’s Sai Micro Electronics citing “security concerns.”

His government signaled in August that Germany planned to expand its military presence in Indo-Pacific waters by sending more warships and joining drills with its allies, with concerns about China’s military buildup clearly in mind.

Scholz explains his own policy as being one in which Germany must avoid providing Beijing with a position of dominance while at the same time cooperating in areas where it can be beneficial.

More broadly, Scholz has compared his foreign policy stance to the Ostpolitik (Eastern Politics) of late West German Chancellor Willy Brandt, the most renowned figure of the SDP, who governed the nation from 1969 to 1974. In his own time, Brandt advocated “change through trade” as a rapprochement strategy to mitigate the threat posed at the time by the Soviet Union.

Last December, shortly after taking office as chancellor, Scholz declared that Brandt, along successor Helmut Schmidt, had “laid the groundwork for democracy in many European countries, where once there had been Communist dictatorships. They laid the groundwork for the Iron Curtain to be dismantled, and for our shared existence within the European Union.”

While these comments were made mainly in connection to Russia, they appear to outline his basic approach to Beijing as well.

Not everyone is a fan. Benjamin Schmitt of the Washington DC-based Center for European Policy Analysis argues that the SDP’s historical “change through trade” policy was a failure. Schmitt considers Scholz’s policy to be stuck in the past and advocate of a “naive” policy. He disparages it as being “zombie Ostpolitik.”

Scholz’s approach does have its proponents as well.

Lilly McElwee of the Washington DC-based Center for Strategic and International Studies (CSIS) suggests that Scholz’s China visit served broader Western interests. She says that Scholz was able to push Chinese President Xi Jinping to offer indirect but unmistakable public criticism of Russia. At their joint press conference, Xi declared that China “opposed the use of, or threats to use, nuclear weapons.” This was widely understood as a warning directed at Moscow, which had been hinting for months that a nuclear weapons response to NATO support for Ukraine is on the table.

Similarly, following the Scholz visit, then-Premier Li Keqiang stressed that negotiations with Berlin had concluded that “any change in Taiwan’s status quo must be peaceful or by mutual agreement.” This statement appeared to moderate the tone of Beijing’s longtime position that the use of force against the island is possible as a last resort to prevent its political independence.

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