The Asia-Pacific Region in Germany's Foreign Policy

The shift of U.S. foreign policy interests to the Asia-Pacific region has marked an important change in the world balance of power. To withstand competition with China for influence in the region, the United States needs the support of allies, especially of such developed and economically strong countries as Germany. It appears that the U.S. will actively seek to involve Germany in its rivalry with China, given the country’s strong economic, financial and political ties with states in the region.

The shift of U.S. foreign policy interests to the Asia-Pacific region has marked an important change in the world balance of power. To withstand competition with China for influence in the region, the United States needs the support of allies, especially of such developed and economically strong countries as Germany. It appears that the U.S. will actively seek to involve Germany in its rivalry with China, given the country’s strong economic, financial and political ties with states in the region.

The Asia-Pacific Region in Germany's New Foreign Policy Concept

The theory is that Germany could play the role of a “moneybag”, so to speak, paying for projects aimed at consolidating the anti-China coalition. This is evidenced by the financial support it renders to various ASEAN institutions and programs for developing regional integration. Since 2005, Germany has spent more than $80 million to this end. Putting the “Merkel doctrine” (i.e. support of countries in the region through the supply of arms) into action could be another possible instrument of German influence in the Asia-Pacific. Currently, Germany is the third largest arms supplier in the world after the U.S. and Russia. Its share is now 7 percent, and judging by the trends of recent years, this will continue to grow. Asia Pacific is one of the most promising markets for German weapons, with the products of the German military shipbuilding and armor industries likely to enjoy particular demand in the countries of the region.

In other words, there is little likelihood that Germany will be able to stay outside global political processes. Rather, it will be forced to seek new approaches and strategic responses to the changing economic situation and political landscape of the world. The question that arises in this respect is how interested the Federal Republic is in “shifting attention” to Asia. Will it pursue an independent foreign policy in the Asia-Pacific region, or will it operate within the framework of the U.S. Pacific Doctrine?

In February 2012, the German government announced a new foreign policy concept – the so-called "New Players Concept” (Gestaltungsmächtekonzept). German foreign policy is shifting its focus to emerging powers with which Berlin is not cooperating within the frameworks of the EU, the G8 or NATO. These countries have high economic potential, demonstrate impressive economic growth at the regional or international level, and are able to exert influence on political processes in the region and the wider world (1, 2).

Photo: blog.thomsonreuters.com
Global arms trade

The new concept is a reaction to changes in the international situation in recent years, and is prompted by the need to protect and support Germany's political and economic interests, with Asia Pacific being assigned an essential role. Cooperation with rapidly developing countries in the region is of great interest to the German economy, as Asia Pacific is a source of natural resources, an investment market, a place to run manufacturing and a product market for goods produced in Germany. The Chinese market, with its population of about 1,000,351 people, is particularly attractive for the German economy. A large share of German exports still goes to the EU, although the economic crisis and the decline in the purchasing power of the populations of these countries have reduced it from 59.15 per cent in 2011 to 57.15 per cent in 2012. Against this background, the economic boom in Asia Pacific could become the lifeline that will allow the German economy to maintain positive growth dynamics in the future (Asia's share in total German exports rose from 13.7 percent in 2011 to 14.08 percent in 2012). The importance of the region in the new German foreign policy concept was reaffirmed by Foreign Minister Guido Westerwelle, during the Asia-Pacific Weeks in Berlin which opened on June 5, 2013. He commented that for China, Vietnam, India and Indonesia the expected growth rate for this year and the next decade was 6 per cent, and that the Chinese middle class increased annually by 15 million people. According to G. Westerwelle, Germany pins particular hopes on cooperation with China, India and the ASEAN countries. Among the latter, he emphasized Indonesia (as the leader of the association), and Vietnam, with which Germany has maintained strategic partnership relations since 2011.

Germany and China

During the German-Chinese governmental consultations in August 2012, Chancellor Angela Merkel called China Germany's most important partner in Asia [1]. Thus, priority for German foreign policy in the Asia-Pacific region is placed on China. This is not an accident. China's importance for Germany is shaped by geopolitical, economic and intergovernmental aspects.

Since the end of the Cold War and the collapse of the USSR, China has occupied a dominant position in the east of the Asian continent and has been gradually drawing into its sphere of influence countries of East and South-East Asia. At present, China is Germany's primary economic partner in Asia and third in significance in the world (1, 2), while Germany is China's largest trading partner in Europe and the sixth in the world (the fourth, if Hong Kong and Taiwan are excluded) (1, 2).

Thus, in 2012 the volume of bilateral trade between Germany and China amounted to 144.1 billion euros, while German exports to China totaled 66.6 billion euros, and German imports from China 77.5 billion euros. Since 2002, China has been the second largest importer of German goods outside Europe, after the United States, and in 2012 it became the fifth sales area in the world. China mainly imports automobiles and spare parts (29.0 per cent of exports), machinery (25.3 per cent), computing hardware, electrical and optical products (8.8 per cent), electrical equipment (8.7 per cent) and chemical products (6.2 per cent). In addition, China is Germany's second greatest supplier after the Netherlands. Germany primarily imports computing hardware, electrical and optical products (35.6 per cent of the total imports), clothing (10.4 per cent), electrical equipment (10.1 per cent), machinery (7.7 per cent) and metal products (4.3 per cent). Since 1989, Germany has had an unfavorable balance of trade with China and has gradually narrowed the deficit since 2008 (-26.8 billion euros). In 2012, imports of Chinese goods exceeded German exports to China by 10.7 billion euros (1, 2)

Photo: WEF
The Global Competitiveness Report 2013-2014:
South and South-East Asia

As to bilateral state contacts between China and Germany, the two have established a positive partnership. Many in China see Germany as the leader of the EU and believe that without its efforts the European Union will not be able to overcome the economic crisis. China's leadership is seriously concerned about the crisis in Europe, as the latter is one of its most important markets, and the weakening of European demand threatens the growth of the Chinese economy. Apart from unfavorable economic consequences, the European crisis entails the EU weakening as a center of power in the multipolar world order. China is interested in a strong and independent Europe, and deems a world shaped only by the competition of two superpowers – itself and the United States – to be less than attractive.

However, it is not only geopolitical and economic considerations that make Germany attractive to China. Many Chinese policymakers and partners perceive Germany as a model that can give valuable impetus to modernizing the state, economy and society in China. Beijing is carefully studying the German experience in creating a social market economy and legal system. The importance of Chinese-German relations is emphasized by bilateral government consultations at the highest level, which are held annually in Berlin or Beijing.

The rivalry between the U.S. and China poses a real challenge for German foreign policy, since relations with both countries are crucial for the country. Should relations between the U.S. and China become seriously aggravated, it would be extremely difficult for the Germans to give preference to either side of such a conflict. Maintaining the existing balance of power in the region seems to appeal to Germany's interests far more than possible hegemony of the United States or China. Moreover, the stable equilibrium between the two gives Germany an opportunity to act as a mediator and arbitrator, and enhance its influence and importance in the international arena.

Germany is interested in an economically strong and politically stable China, but at the same time, German politicians fear its excessive empowerment. This may explain their readiness to take certain steps in line with the U.S. Asia Pacific strategy and render support to the forces in the region that could (at least potentially) compete with China. For this reason, Germany has long been seeking to establish intensive cooperation with India, as well as with the 10 member countries of ASEAN.

Germany and ASEAN

Germany interacts with the ASEAN countries within the framework of both bilateral relations and cooperation between the EU and ASEAN. German policy in respect of this association is in line with the EU policy aimed at promoting integration in South-East Asia and enhancing EU-ASEAN cooperation. However, in contrast to France and Britain, which seek to increase their influence in the Asia-Pacific region and participate in various regional forums (the East Asia Summit), Germany displays little interest in issues of security and pays much more attention to the development of trade and economic relations with the ASEAN countries. As a result, German trade relations with countries of South-East Asia have shown positive dynamics in recent years. Negotiations on a free trade agreement with Singapore and Malaysia are underway at the EU level. The next goal after that should be concluding a free trade agreement between the EU and ASEAN. Cooperation between the two associations provides a platform for discussing an issue which is very important to Germany, that of sea route safety, particularly in the Malacca, Lombok and Sunda Straits (through which a large part of German trade with South East Asia and China is shipped) [2]. Germany’s bilateral relations are closest with Indonesia and Vietnam out of the ASEAN countries.

Photo: EPA / vosizneias.com
German Chancellor Angela Merkel walks with
Indonesian President Susilo Bambang
Yudhoyono at the Presidential Palace in Jakarta,
Indonesia, 10 July 2012.

Indonesia is an attractive foreign partner for Germany due to its political weight as the regional leader, its sustainable economic development and its democratic system. Germany is Indonesia's most important trading partner in the world and the tenth most important in Europe [2]. Cooperation between the two countries in the military sphere is developing: in 2012 Indonesia ordered 130 Leopard-2 tanks and 50 Marder infantry fighting vehicles. In May 2013 the German government authorized the sale, although the quantity was reduced. In 2009, collaboration between the Bundeswehr and the armed forces of Vietnam was initiated, and, according to the Vietnamese military, Germany is regarded as the best partner for enhancing the country’s cooperation with the West. The government of Germany considers Indonesia and Vietnam (much like India) to be sources of highly qualified personnel in the fields of mathematics, IT, natural sciences and technical disciplines. According to German government circles, attracting professionals from these countries could make up for the shortage caused by the Federal Republic's demographic decline.

As German political scientist Marius Laban has notably observed, the significance of Vietnam and Indonesia in German foreign policy appears disproportionately high, given the existing level of economic ties between Germany and these countries [3]. This phenomenon cannot realistically be explained by the Vietnamese origins of Vice Chancellor Philipp Rösler, or by the influence of the Vietnamese diaspora present in Germany since the days of the GDR. The tendency to strengthen ties between Germany and Vietnam had been in effect long before F. Rösler occupied his current position, and the Vietnamese diaspora in Germany is not that large or influential (it does not exceed 125 thousand people). Germany's increased attention towards Vietnam and Indonesia is most likely due to the considerations of the Federal Foreign Office itself, based upon the strategic positions of these countries and on steps taken in line with the U.S. plan to neutralize China.

Germany and Developed Asia-Pacific Countries

Germany maintains and develops partnerships not only with emerging powers, but also with the industrialized countries of the region – Japan, South Korea, Australia and Singapore.

Japan and Germany have long-standing friendly relations. The importance of the former for German foreign policy has been slightly declining in recent times against the background of China’s and India’s rapid development. However, it should be noted that Japan is still Germany's second largest economic and trading partner in Asia after China. Thus, for the first six months of 2012, German exports of goods and services to Japan amounted to 12.4 billion euros, while imports from Japan to Germany during the same period of time totalled 16.2 billion euros. In other words, total trade turnover between Germany and Japan in the first half of 2012 reached 28.6 billion euros.

The expected opening of the Japanese market to foreign goods will give Germany an opportunity to significantly increase the volume of its exports to that country in coming years. Japan and Germany share many economic, financial and political interests. Both countries are G4, G8 and G20 members. In the G8 and G20 they have common interests in the fields of environmental protection, disarmament and non-proliferation of weapons of mass destruction, as well as crisis settlement in Afghanistan and Somalia. Within the framework of the G4, Germany and Japan (together with India and Brazil) are seeking to reform the Security Council, demanding to increase the number of permanent members with veto power.

Japan relies on German support in the territorial conflict over the disputed Senkaku islands in the East China Sea. This issue was discussed in October 2012 in Berlin at a meeting of former Minister of Foreign Affairs of Japan Koichiro Gemba and Federal Minister for Foreign Affairs of Germany Guido Westerwelle. In addition, the countries have held regular bilateral consultations at deputy foreign minister level outside the framework of the Munich Security Conference. The last consultation took place in late January – early February 2013 between German Minister of State Michael Georg Link and Japanese Vice-Minister for Foreign Affairs Toshiko Abe.

Germany also has a close and trusting relationship with South Korea. In the 1960-1970s, the Federal Republic of Germany made a significant contribution to the Korean economic miracle, which laid the foundation of the country's present prosperity. Currently, South Korea is the third importer of German goods in Asia after China and Japan; in 2012 its share was 1.22 per cent of the total of German exports. Germany is South Korea most important trading partner in Europe. In 2012, the total volume of trade between South Korea and Germany amounted to 21.8 billion dollars, of which 13.4 billion came from exports of German goods to South Korea and 8.4 billion from imports of Korean goods to Germany. In the international arena, South Korea and Germany share common interests: strengthening the multilateral trading system; promoting multilateral international relations; maintaining economic growth and financial stability (both countries are G20 members); participating in peacekeeping operations; solving environmental and climate change problems; and combating the spread of weapons of mass destruction. In addition, Korea displays a great deal of interest in Germany's reunification experience as a country that was once split into two hostile parts, as well as in the specifics of its federalism and electoral system. This interest explains the fairly frequent visits to Germany by South Korean delegations at various levels. One such delegation of high-ranking representatives of the National Assembly of South Korea visited the Bundesrat in August 2013 and was received by State Secretary and Director of the Secretariat of the Bundesrat Gerd Schmitt.

Photo: Nato.int
Stephen Smith (Minister of Defence, Australia)
and NATO Secretary General Anders Fogh
Rasmussen signing the Individual Partnership
Cooperation Programme document

 

In recent years the German-Australian relationship has become noticeably more active. Australia is playing an increasingly prominent role in the region (it is no coincidence that Barack Obama made his famous speech about the U.S. “turning to the Pacific” in Australia's capital Canberra), which puts it in the limelight of German foreign policy. In turn, Australia recognizes the Germany's leadership in the EU and is interested in developing relations with it. German-Australian cooperation is being particularly fruitful in the fight against terrorism and drug trafficking, and in protection of the environment. Politically, both countries are closely connected with the U.S., and economically with China (China is Australia's most important trading partner, with the United States occupying second place). This renders Australian and German positions in the region sufficiently close, and provides a basis for common foreign policy interests. Australia, like Germany, is interested in maintaining the political balance between the U.S. and China. In addition, Germany and Australia share a common interest in the safety of trade routes, participate in peacekeeping operations in Afghanistan, and are concerned about problems of the environment and climate change, disarmament and non-proliferation of nuclear weapons. Germany is Australia’s second largest European trading partner after the United Kingdom, and the twelfth in the world. In 2012, the total volume of trade between the two countries amounted to 12.3 billion euros, with the trade balance in Germany's favor (Germany exports goods worth 9.3 billion euros to Australia, while the exports of Australian goods to Germany add up to about 3 billion euros). The Federal Republic supplies automobiles and spare parts, chemical and electrical products, synthetic materials and equipment to Australia. The most important goods coming from Australia are gold, coal and metals.

Despite its good relations with Japan, South Korea and Australia, Germany is opposed to the American initiative to admit these countries into NATO. There are several reasons for this position. First, the admittance of Australia, Japan and South Korea into the North Atlantic alliance would mean automatic placement of Germany in conflict with China, with escape impossible due to Article 5 of the North Atlantic Treaty. Second, various political movements in Germany, including certain wings of the SPD and the Green Party, are against NATO expansion.

At the same time, Germany supports the cooperation of these countries with NATO, and is interested in developing relations with them in economic and military spheres. Thus, in January 2012 a joint road map was agreed, and in January 2013 Australia and Germany signed a Strategic Partnership Agreement. Next in line is signing similar agreements with Japan and South Korea. Among the largest importers of German weapons in the world are Singapore (343.8 billion euros in 2011; 4th place among all importers of German weapons) and South Korea (198.6 billion euros in 2011; 9th place among all importers of German weapons).

In recent years, contracts for arms sales to Australia have been insignificant, amounting to 771 thousand euros in 2011 (1, 2). However, the contract values will rise considerably if the Australian government signs a contract with Germany for the purchase of Dolphin submarines.

Germany and Russia in the Asia-Pacific Region

For a long time there have been virtually no points of contact between Russia and Germany in the Asia Pacific region. Both countries have been primarily focused on their European affairs. However, the shift of the center of gravity of world politics in the Asia Pacific region could not be ignored either by Germany or by Russia, especially given that a significant part of the latter is located in this region. Despite different geopolitical positions, the two countries have many common interests in the region. Germany and Russia are both interested in strengthening their influence in the Asia Pacific region, which is only possible if the existing parity between China and the United States is maintained. Both countries are concerned by the rise of China and at the same time need it as an important economic partner. It might seem that the coincidence of interests in many strategic issues in the Asia-Pacific region makes Russia and Germany natural allies. To a certain degree, this is true: Germany sees in Russia a regional power which can in some way curtail the growth of Chinese power. Therefore Russia can count on Germany's support in all matters in which the Russian position runs counter to the position of the PRC. At the same time, Germany, like the U.S., is not interested in a rapprochement between Russia and China, as this risks shifting the balance of power in the Asia-Pacific region in favor of China.

Is There a German “Turning” to the Asia-Pacific Region in the Offing?

One should not expect something like the U.S. “turning” to Asia from Germany while its political and economic interests are focused on Europe. The balance of power in the Asia-Pacific region, shaped by the rivalry between China and the United States, does not allow Germany to make a clear choice in favor of either of the sides, as the country cannot afford to worsen relations with either party. Therefore Germany will most probably continue to promote balance in the region, keeping the role of an intermediary between China and the United States. However, economic interests, the obvious unwillingness to be on the sidelines of world politics, and the persistent pressure of the United States will inevitably lead to a gradual strengthening of German political influence in the Asia Pacific region. This means that in the next few years we should expect increased efforts of German diplomacy in the Asia-Pacific direction, aimed at strengthening bilateral relations with the emerging powers.

There is little doubt that, in addition to traditional instruments, Germany will set into motion its favorite tools, such as assistance to individual companies or even entire industries, as well as increased funding for research programs and projects supporting economic elites in the countries with which the German side is interested in developing relations. This refers primarily to Vietnam and Indonesia, but, it seems, will also become relevant to other ASEAN member states.

1. Mißfelder Ph. Asiatischer Aufstieg und deutsche Chancen // Die Politische Meinung. Dezember 2012. S. 55.

2. Loewen H., Hilpert H.G. Indonesien als Partner deutscher Außenpolitik // SWP. Februar 2012. Berlin.

3. Labahn M. Südostasien in der Außenpolitik der Bundesrepublik Deutschland. IUDICIUM Verlag Gmbh, München, 2013. S. 54–55.