BERLIN, July 7 — Olaf Scholz, who has been Germany’s Chancellor since December 8, 2021, is steering a course toward China that his government calls “de-risking.” The mechanics here are straightforward in theory: maintain economic ties with Beijing while systematically reducing German industry’s dependency on a single, geopolitically complicated partner. The catch is that “de-risking” is easier to announce than to execute. Scholz, born June 14, 1958, spent the years from 2018 to 2021 as Vice Chancellor and Finance Minister under Angela Merkel.
That was the era when German-Chinese trade deepened to the point where entire industrial sectors — automotive, chemicals, machinery — became tightly woven into the Chinese supply chain. Scholz inherited that architecture.
Now he is trying to retrofit it.
The China strategy, on paper
In July 2023, Scholz’s government published a comprehensive China strategy. That document, on closer reading, did not call for a break. It called for balance.
The strategy supported European Commission investigations into Chinese state subsidies — a move that, in Brussels, has targeted everything from electric vehicles to solar panels. The logic: if Beijing is flooding markets with state-backed goods, European industry cannot compete on fair terms.
But follow the money. German carmakers still sell millions of vehicles in China. German machine-tool builders still rely on Chinese factories for components.
A sudden decoupling would hit Germany’s export-driven economy harder than almost any other in Europe. The “de-risking” framework, therefore, is as much about managing the pace of change as it is about changing direction.
A chancellor’s travels
Scholz visited China in November 2022 — his first trip as chancellor. The agenda, according to his office, emphasised dialogue. He raised concerns about market access for German companies, a perennial complaint from European executives who find China’s regulatory environment increasingly opaque and tilted toward local champions.
The trip was notable for what it did not produce: any grand new agreements or strategic partnership declarations. Scholz was careful.
He acknowledged the economic weight of the relationship but also signalled that Berlin was watching Beijing’s behaviour — on subsidies, on intellectual property, on market access — with a more skeptical eye than some previous German governments.
The industrial challenge
Scholz’s leadership is critical now as Germany navigates industrial challenges from Chinese competition. The catch is structural. German industry built its post-reunification success on cheap Russian energy, open Chinese markets, and a rules-based global trading system.
Two of those three pillars are now unstable. Energy costs have spiked.
The trading system is under strain from subsidy wars and tariff disputes. The de-risking strategy tries to preserve the third pillar — trade — while acknowledging that the first two have shifted. Whether that balancing act holds depends on factors Scholz cannot fully control: Chinese industrial policy, European Commission enforcement, and the willingness of German companies to restructure their own supply chains.
What to watch next is whether Scholz’s government moves from strategy papers to concrete measures — tighter investment screening, export controls, or subsidy-matching programs — that would make “de-risking” more than a diplomatic phrase. The chancellor has the tools.
The question is whether he has the political space, and the industrial consensus, to use them.
