Wednesday, 1 February, 2023

Scholz courts Vietnam, S’pore after China visit

SINGAPORE: Germany was looking to "diversify" its trading partners to reduce the risk of over-reliance on individual countries such as China, Chancellor Olaf Scholz said Monday.

"We are looking to diversify our supply chains to look where we can go to get row materials and industrial products," Scholz said at the end of a three-day trip that took him to Singapore and Vietnam, reports AFP.

Following a controversial visit to Beijing, the first by a European leader since the outbreak of the coronavirus pandemic, Scholz said Germany would not be turning its back on the key market.

"We are against any decoupling of China in the world economy because we are deeply convinced that globalisation has brought a lot of progress," Scholz said Monday.

"But we have to be clear that globalisation also means not to just look to one country."

Under the backdrop of tensions between the West and Beijing over its ties with Russia and human rights issues, Germany has looked to reduce its dependence on China in key technologies, such as semiconductors.

"We are asking for real access for developing into a market economy," Scholz said of China.

The tour through southeast Asia ahead of the G20 meeting in Indonesia was meant to underline Germany's commitment to other partners in the region after the chancellor's Beijing visit.

Singapore and Vietnam were among the "dynamic" countries in the region where Germany wanted to develop its cooperation, Scholz said in Hanoi on Sunday.

Scholz noted Vietnam's major stores of rare earth minerals, a key raw material for green industries, including in the production of batteries, where China currently dominates the market.

"We have started talking about possibilities to use them (rare earth minerals), for German companies to make investments, including together with Vietnamese partners, in order to have many supply relationships, so that we can always endure when there is stress with one country," Scholz said.

Earlier, German Vice Chancellor and Economy Minister Robert Habeck has said Germany is not averse to trade with China in principle, but there are certain sensitive areas in the country’s economy where Beijing’s investment may not be welcome.

The statement came shortly after Berlin blocked Chinese buyouts of companies manufacturing semiconductors and computer chips.