EEconomy Minister Robert Habeck’s landing in Singapore on Saturday was not an easy task. It is true that the previous foreign trips were not about finally buying liquid gas and fighting the acute energy crisis. But Habeck has made it his mission not to turn his visit to Southeast Asia into an anti-China one — even though it certainly is.
In Singapore, the economy minister wants to open up new sales markets primarily to German companies and will attend the Asia-Pacific conference at the weekend. The conference fits “right into the political landscape,” as Habeck says immediately before departure, with lots of talk about diversification and new, alternative markets.
Learning from the energy crisis following Russia’s war of aggression in Ukraine, the federal government has decided to reduce its dependence on China — without alienating the Chinese if possible.
Accordingly, travel to Southeast Asia should be routine. He agreed to participate in the conference almost a year ago. “So it’s not entirely correct: this trip is now planned and designed in response to the debate about China,” says Habeck.
But he adds: “This time we are again deepening negotiations at the highest political and corporate level with a strong economic sector”. So the trip is “like a counter-shot to the debate we’re having around banned investments and China”.
State guarantees are very expensive
In fact, in the past few days, more decisions have been made aimed at slowing down the Chinese. Only the entry of Chinese investors into the port of Hamburg was partially banned and even the purchase of two chip companies was completely banned. Just before the trip, the federal government targeted investments by German companies in the People’s Republic.
Habek confirms what is already known from sources in his ministry: in the future, state guarantees that can be used to protect investments abroad against political risks will become more expensive in China than in other countries.
Although the proposed measure is not only aimed at the People’s Republic, it is the only 20 percent limit of all safe investments that must be accumulated in a country for the higher insurance premium to take effect. Affects China second only to Russia.
The minister confirmed that a new cover would also be put in place. In the future, investments of up to three billion euros per company and country will be guaranteed. Big companies like Volkswagen Reach this limit quickly. “Companies are still free to do more, but we don’t provide the same degree of state protection as we used to,” Habeck says. “We’ll create an incentive to diversify.”
Making investments in China is not too difficult, says the minister. But the guarantees “must follow the goal of value for the German economy,” he says. “That means we have to avoid cluster risks.”
To achieve this, the Federation has also agreed on a new trend towards free trade. Several free trade agreements already negotiated, such as CETA between the EU and Canada and agreements with Chile and Mexico, are now rapidly being ratified.
The trip to Singapore also fits in well with the timing, “As we’ve been working hard again in the last few days and weeks, the ongoing free trade agreements, especially the agreements with Chile, Mexico and CETA, we’re now really through the door. “I’ve made good progress there,” says Habeck. “And further talks on the partnership will begin in the next three to four days.”
So on Saturday evening, before the conference officially began, Habeck met with Singapore’s trade and economic ministers. Further talks with representatives of Pakistan and the Philippines are planned on the sidelines of the conference until Monday.
The Traffic Light Alliance also agreed to withdraw from the so-called Energy Charter in order to reach agreement on trade policy and, above all, advance the ratification of CETA. Based on this international agreement, energy companies sued Germany for damages, which is why greens in particular saw it as an obstacle to the energy transition.
Reform of the Charter failed at the European level. According to coalition sources, the FDP agreed to leave in exchange for approval of a free trade agreement. Habeck described the deal as a “trade policy milestone”.