Germany wants to reduce its economic dependence on China

BERLIN, Nov. 11 (DPA/EP) –

The German government is planning to direct more foreign investment to markets outside of China with the aim of reducing dependence on the world’s second largest economy.

At the proposal of the Minister of the Economy, Robert Habeck, the Executive coalition of Chancellor Olaf Scholz has agreed to review the mechanism of the so-called investment guarantees, according to ministerial sources collected by the dpa agency.

Cabinet investment guarantees allow German companies to insure their investments in emerging and developing countries against political risks, such as expropriation or capital and transfer restrictions.

The news comes as Habeck is scheduled to travel to Singapore on Friday to attend a German business conference. Scholz will also attend, traveling to Singapore from Vietnam, before flying to the G20 summit in Bali.

The Asia-Pacific Conference of German industry, to be held on November 13-14, will focus on how to expand supply routes. Germany’s dependence on Russian fossil fuels has triggered a wide debate about reducing economic dependence on China.

The revision of the mechanism would provide German companies with greater support in opening new markets in the future, and would create an incentive for diversification. German companies would receive “effective” help to launch projects in countries that until now have not been the center of economic activity, but which offer great potential, according to the sources.