Diversification under way, Scholz says, as German firms warn against damaging ties with China

BERLIN, Nov 22 (Reuters) – German Chancellor Olaf Scholz said on Tuesday that Germany would not repeat the mistakes it made with Russia in China and was already diversifying its trade.

Speaking at an economic forum hosted by the Süddeutsche Zeitung Zeitung, Scholz expressed his conviction after talks with German industry that companies are connecting with other markets and preparing for a more multipolar world.

“The mistake of relying on Russia will not happen again,” he said, referring to Germany’s decades-long reliance on Russian energy supplies.

His comments came after representatives of German industry reacted critically to a leaked draft of a new Berlin strategy and called for more political support to diversify trade and secure key raw materials.

A major German company with a strong presence in China expressed concern on Tuesday that the tone of the strategy could damage its relationship with its Chinese partners.

“Every line of the text clearly demonstrates the mistrust of China and market players like us,” said the business representative, who spoke on condition of anonymity due to the sensitivity of the matter. “The frame is the problem.”

The draft Foreign Office document advocates stronger trade links with other economies, while tightening controls on Germany’s trade with China, including “stress testing” dependencies on raw materials and reviewing the impact of German investments on the environment and human rights.

“The stress test will be another bureaucratic hurdle that only we will face, not our competitors from other countries. What’s the point of that?” the business representative said. “Of course we want more open trade with China … but every region of the world has its own problems.”

Reporting by Riham Alkousaa and Victoria Waldersee, writing by Rachel More, editing by Miranda Murray and Tomasz Janowski

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