Germany has appointed an expert commission to rethink its trade policy toward China after recent export restrictions on rare earths highlighted the country’s vulnerability. The move accelerates a “de-risking” strategy aimed at reducing Germany’s economic dependence on its largest trading partner.
The commission, composed of industry representatives, labor groups, and think tanks, will deliver actionable recommendations to the government on energy, raw material imports, and Chinese investment in critical infrastructure. The initiative comes just before Finance Minister Lars Klingbeil travels to China to address EU trade concerns, News.Az reports, citing Reuters.
Germany has long benefited from access to China’s massive market, but Beijing’s export curbs, particularly on rare earths—of which Germany imports about 80%—revealed the risks of overreliance. A study by the German Economic Institute found that, despite a 2023 strategy recommending “de-risking,” the country’s dependency on China remains largely unchanged.
Experts warn that while import dependency is concentrated in a few product areas, these could have significant economic consequences. “The elephant in the room is the dependency,” said Jens Eisenschmidt, Chief Europe Economist at Morgan Stanley, noting that full decoupling is unrealistic.
Chancellor Friedrich Merz, who took office in May, initially prioritized relations with the U.S. and global stability issues, but China’s restrictions have made trade vulnerabilities impossible to ignore. Recent supply chain disruptions, including tensions over Dutch chipmaker Nexperia, have further underscored the need for a strategic rethink.