Why Germany’s coalition talks matter for China, Europe and the world

Three German political parties are negotiating a new coalition, which will have implications for Berlin’s foreign policy
The recent election indicated a relative political consensus on topics like global warming, but a sharper divergence over China and related human rights issues

Andrew Hammond

Published: 1:30am, 15 Oct 2021

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With Germany taking over the G7 presidency in January, the three political parties negotiating a new coalition in Berlin are expected to begin formal talks next week – sooner than expected – to try to take up the reins of power before the end of the year.

Germany’s hosting of the Group of 7 in 2022 is not the only big, upcoming international event that is injecting urgency into the coalition negotiations as this autumn will also see the G20 summit in Rome and the United Nations Climate Change Conference, COP26, in Glasgow.

While a new coalition is unlikely to be forged before those summits, which Angela Merkel is likely to attend in her role as caretaker chancellor, her expected replacement Olaf Scholz will want to ensure that he is in power in time to kick off his nation’s big G7 year.

The anticipated German “traffic light” coalition – led by the centre-left Social Democrats, with the pro-business Free Democrats and the Greens as junior partners – could soon be driving important policy changes.

While many expect the Greens, who placed third in last month’s election, to make a contribution to sustainability or environmental issues, it could be other issues such as China where they have an unexpected impact.

This is because this year’s election indicated a relative political consensus among the key parties on topics like global warming. However, there is a sharper divergence over China ahead of the 50th anniversary of bilateral ties next year, compared to the Merkel era, which could lead to a more conflictual policy, including on human rights and Xinjiang.

The Greens advocate a more strongly human-rights-centric approach to Beijing. Recently, one of the party’s members of the European Parliament, Reinhard Bütikofer, asserted that, “Germany’s unbalanced China policy [is] heavily skewed towards the interests of a few multinational corporations at the expense of other sectors of our economy, and certainly at the expense of our values and security concerns.”

The closeness of Beijing and Berlin over the past decade and a half was underlined by Chinese President Xi Jinping on Wednesday, when he held a video conference with Merkel. He said she was an old friend of the Chinese people and would always be welcome to visit the country after leaving office.

Beijing regards Merkel as a stabilising ally who helped to counteract the growing number of American and European politicians, including former United States president Donald Trump, who have been calling for decoupling from China.

Why Germany’s post-Merkel shift is no threat to China’s interests

In recent months, the German chancellor has continued to push hard for the European Union-China investment deal, which was made last year. She also spoke out against the idea that democracies should unite to isolate Beijing diplomatically.

Owing in part to the strong economic relationship between Germany and China, Berlin has traditionally been non-confrontational with Beijing on human rights.

In the years preceding Merkel’s rise to power in 2005, China joined the World Trade Organization; German firms, many of which set up operations in China in the 1970s, profited big time. Since 2015, China has been Germany’s largest trading partner, with the pair exchanging more than US$250 billion in goods in 2020.

Yet, Merkel’s “change through trade” strategy has fewer supporters now. Under Xi, China’s economy remains under tight state control, and its alleged human rights abuses against Uygurs in Xinjiang and political dissidents have received more attention.

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China aside, one of the broader concerns held by many about the potential coalition of three, rather than two, parties is that the direction of Germany’s foreign policy will be more contested.

And this after the last decade and a half of Merkel on the international stage, helping to steer Europe through the political and economic tumult, whether it was the euro-zone economic crisis or the more recent migration challenges.

This underlines that, ultimately, Germany’s political flux is not just a domestic issue, but an issue that also matters deeply for Europe, and indeed for the world at large.

Historically, many Germans have been generally content with their post-Cold War lot, seeing themselves as beneficiaries of globalisation. However, this may be changing as shown by the rise of smaller parties with, for instance, the Greens leading polls five months before the recent elections.

Going forward, the nation’s multiparty future may mean that politics will generally be more unstable and less predictable, with an even greater challenge each election cycle to establishing a governing coalition.

Such rotating coalitions could bring problems, including political paralysis and the prospect of the chancellorship becoming weaker, a challenge Scholtz may soon have to contend with if he replaces Merkel.

The nation is now at a historical crossroads. While a multiparty system could have some positives, the political danger is a potentially weaker Germany and Europe in a decade of geopolitical flux and economic uncertainty.

Andrew Hammond is an associate at LSE IDEAS at the London School of Economics