‘We need a real policy for China’: Germany ponders post-Merkel shift

‘We need a real policy for China’: Germany ponders post-Merkel shift

The country will be key to whether Europe works more with the US to defend democracy or seeks to engage Beijing

Few people have heard of IMST — a small German company with just 145 employees, specialising in satellite, 5G, and radar technology. That was until last month, when the government in Berlin stopped it being acquired by a subsidiary of Casic, the Chinese arms conglomerate. The deal, concluded the German economics ministry, represented a “serious threat to public order and national security”.

“What is being sold? It’s a key technology that the Chinese don’t have . . . Why is it being sold? Because there’s a gap the Chinese have to fill,” a German official told the Financial Times. “It’s not just about weapons, it’s also about high tech, different sectors where Germany is a world leader.”

The nixing of the IMST deal is symptomatic of a growing mistrust overshadowing the Sino-German relationship. It also provides important pointers to the future direction of German policy on China after Angela Merkel, chancellor for the past 15 years, finally quits the political stage.

Ms Merkel personifies old ideals of rapprochement — the principle that ever deepening economic ties with the west would encourage political change in Beijing, and a shift to liberalism and western values. “Wandel durch Handel” — change through trade — was for years a key precept of German policy.