“We must not let things get as far as with Russia”

WORLD: Do we have to be afraid of China, Mr. Bütikofer?

Reinhard Bütikofer: No, especially since we don't have to face the People's Republic alone. But if that is to remain the case, then we must show ourselves up to the challenges that China is posing to us. Just sit back and think it will be fine and watch as this totalitarian regime with hegemonic ambitions tries bit by bit to expand its circle of influence, that's not possible. That would eventually lead to a situation where you would have to be really scared.

WORLD: What do you suggest?

Bütikofer: We Europeans should team up much more closely with like-minded democratic countries, such as Japan, Australia, South Korea, Canada, but of course also the USA, in order to counter China's claim to global dominance. The Ukraine war, bitter as it is, has shown that democracies can muster great willpower together. There are also many countries in the Global South that can be won as partners – India, for example. It would be important that in the case of China we do not let things go as far as we did with Russia.

China maintains close ties with Russia. Beijing now wants to mediate in the Ukraine war. WELT chief commentator Jacques Schuster is skeptical: "It's about looking for compromises." But nothing was said about it in Putin's speech. "There was only hatred and lies and deceit."

Source: WORLD

WORLD: China has presented a 12-point plan on how peace could be achieved in Ukraine. Does the plan work?

Bütikofer: The plan in no way shows how peace can be achieved. It is a Potemkin village. He should throw sand in our eyes.

WORLD: Why?

Bütikofer: With this paper, Beijing is still on Moscow's side. Not once does it mention that this war resulted from Russia's illegal attack on Ukraine, that Russia must withdraw its troops and respect Ukraine's internationally recognized borders.

WORLD: But China's plan expressly refers to the territorial integrity of each state.

Bütikofer: So much for the lip service. However, this should be read in conjunction with the reference that Russian security interests must be safeguarded.

WORLD: And what does that ultimately mean?

Bütikofer: Russia sells its imperial ambitions as security interests. Recognizing this meant that Ukraine had to give up its sovereignty. According to this worldview, major powers have more sovereignty than smaller countries. China sees it the same way.

WORLD: Is the traffic light coalition then on the right China course?

Bütikofer: We're still wrestling with the course to some extent. In the coalition agreement, however, this federal government has set itself the goal of doing a lot more right with China than its predecessors.

WORLD: After almost a year and a half in office, that is not yet apparent.

Bütikofer: Well, it is already clear that there will be no return to Angela Merkel's China policy. It was a head-in-the-sand policy. We no longer ignore Taiwan or Xinjiang. I don't even think that Ms Merkel didn't see the risks. She just didn't want to face them.

WORLD: The reality under the Scholz government looks like this: We have more China instead of less. German imports from China were 80 percent higher than exports in 2022. And in the first half of 2022 alone, German direct investments in China rose to ten billion euros, an absolute record.

Bütikofer: Okay, let's take direct investments. In the last three years, around 80 percent of all new European investments in China have been financed by ten large companies alone, four or five of which were German companies.

WORLD: You mean the automotive groups plus Siemens and BASF.

Bütikofer: Above all, I think that German medium-sized companies often see China more clearly than certain large corporations. They are more cautious, have understood that it is necessary to diversify. Just don't put too many eggs in one basket.

WORLD: But German investments are very welcome in China.

Bütikofer: You are welcome as long as the companies have the financial strength, production capacities and technology that the Chinese economy needs. If at some point this is no longer the case, you have done your duty and can go, see railway industry. That's how it went. This has absolutely nothing to do with a long-term partnership. China wants to become self-sufficient as quickly as possible.

WORLD: Aren't billions in investments in China far too risky because of the policies of the Communist Party and China's military ambitions?

Bütikofer: Please don't go to the other extreme. I am not for decoupling. Not 'de-coupling', but 'de-risking' towards the dictatorial regime must be.

WORLD: Where is the danger?

Bütikofer: Excessive economic dependencies can be used as a political lever. China does this routinely. I know that Chinese diplomacy has in the past put pressure on German automotive companies to intervene in German politics on behalf of China.

WORLD: What happens when the billions invested by German companies become a loss-making business because Beijing suddenly decides to change course or extensive international sanctions are imposed on China as a result of an attack on Taiwan?

Bütikofer: That's a point. Because companies like VW are systemically important for us and the bill for the lost billions could end up on the taxpayer's table.

WORLD: What could be done about it?

Bütikofer: Politicians must make it clear to business that they cannot pass on the business, economic and security policy risks of their business models to society. In the future, the economic and political risks of large investments in China must be addressed in good time and made transparent. There must be no free-riding by large corporations. As in a market-based environmental policy, the costs must be incurred where they are caused.

WORLD: What could that look like exactly?

Bütikofer: First of all, we would have to establish the principle. Then we can think about various instruments, such as insurance against defaults, certain balance sheet requirements or higher hurdles for state guarantees when investing in China. This is currently the subject of lively debates.