Internal document of the German Social Democratic Party: Advocating a tougher trade stance against China

German weekly Die Zeit reported on October 5 that the Social Democratic Party document seen by the newspaper stated that China’s economic policy is based on state subsidies and excess production capacity caused by administrative actions. "For Chinese enterprises, this has brought about structural competitive advantages, which cannot be achieved through pure market economic means." Regarding this "distortion", the German political circles must respond more effectively.

"Time" weekly reported that this Wednesday, the joint ruling committee will hold a meeting to establish its future China policy. The newspaper reported that in the past few weeks, Berlin has generally tended to adopt more restrictive measures against China in view of the threat from China's cheap imports to German local industry. However, in the grand coalition government (League, Social Democrats), there are two camps on this issue.

According to reports, the Ministry of Economic Affairs led by the Alliance Party and part of the Prime Minister's Office hope to adopt an extremely cautious attitude in adopting trade protection measures for fear of damaging the openness of the market and the rules of the world economic order.

Although the Social Democratic Ministry did not doubt free trade and the adoption of protective measures in accordance with WTO rules in the document, it stated that China has systematically undermined existing rules and Germany must respond.

Support countervailing investigations into hybrid vehicles

The Times weekly reported that these ministries and commissions support the European Commission’s anti-subsidy investigation into Chinese automobile companies. The target is plug-in hybrid electric vehicles. The Social Democratic Party document stated that for German car companies, such cars are "a matter of success or failure." So far, the EU's special tariffs on China have only targeted pure electric vehicles.

Within the EU, there are also differences on how to defend against the influx of Chinese imports. Opponents of tougher policies believe China may take countermeasures such as restricting rare earths.

The Ministries of Labour, Development, Finance, Justice, Defense, Construction and Environment, led by the Social Democratic Party, pointed out that the European sales market is of great significance to China's economic model and therefore can be used as a "pressure point" in countermeasures with China.

According to "Times", the Social Democratic Party's document also called for local manufacturers to benefit more from state support projects for electric vehicles. In addition, the SPD also called for stricter scrutiny of China's compliance with minimum social and environmental standards.

This week, the leadership of the coalition parties (CDU, CSU) and the SPD will attend a meeting of the governing coalition council. Responsible for the SPD part is Finance Minister and Deputy Chancellor Klingbeyer.

According to Agence France-Presse, Europe and China have been negotiating for weeks to avoid a trade dispute. On Thursday (October 8), EU Trade Commissioner Sefcovic went to Beijing, hoping to discuss preliminary results with Chinese Minister of Commerce Wang Wentao. Regardless of the outcome of this trip, next week, EU heads of government will hold a summit to discuss their stance on China.