I wrote a bit on Tuesday about Germany’s potentially dangerous business entanglement with China (for another indication of how far this has gone, click on the link here to a tweet by David Goldman. It shows a massive increase in exports from China to Germany, but that doesn’t mean what most might think).
Essentially, as Goldman explains:
Massive increase in German-Chinese economic integration: German companies shifting ops to China and exporting back home.
In Goldman’s view, Germany “is becoming a satellite of the Chinese economy”.
Goldman’s book, You Will Be Assimilated: China’s Plan to Sino-Form the World, is well worth a look. It is not comforting reading. We ran an excerpt on Capital Matters last January. Here’s an extract from the excerpt:
Huawei is building the world’s biggest Cloud computing capacity and racing to design the world’s fastest artificial-intelligence processors. And behind Huawei stands the Chinese government’s massive commitment to supercomputing, and — most ominously — to quantum computing. The conversation with Huawei’s Paul Scanlan was a blast of cold air. Americans are busy with the valuation of competing providers of streaming video, the relative merits of e-commerce platforms at Amazon and Walmart, and the profitability of the 110th smartphone dating app. The Chinese want to transform the way we live. They do the physics, and we do the apps. We are becoming geeks in a new Roman Empire.
But back to Germany. In Tuesday’s piece, I drew heavily on an article for the Spectator by Katja Hoyer. She noted how the Sino-German business relationship had deepened during the chancellorship of Angela Merkel, someone frequently described as the leader of the free world, which, to be fair, was not a title she appreciated. So far as China is concerned, Merkel’s successor, Olaf Scholz, wants, Hoyer noted, to continue along the same path. But that is causing some problems with the Greens, one of his coalition partners, who are less than impressed with China’s human-rights record.
And so:
Scholz’s solution to the conflict with his coalition partner is to dress up deepening ties with China as a Green Deal. He wants to work with China and the G7, of which Germany holds the presidency for 2022, to promote Green growth. Business leaders have joined in the chorus and even suggested that an end to Germany’s efforts to go carbon neutral was nigh if the country lost its imports of solar panels from China.
Hoyer’s view was that this ploy was unlikely to succeed, but that’s not for want of trying. On Monday, the Spectator’s Steerpike columnist drew attention to the position on China being taken by the German tech giant, Siemens, and its CEO, Roland Busch, someone who also made an appearance in Hoyer’s article:
Siemens boss Roland Busch has recently called for a ‘respectful exchange’ with the People’s Republic which ‘has every right to be confident. In the last 20 years it pulled one billion people out of poverty and established a veritable middle class.’
But back to Steerpike:
Numerous reports point to slave labour being used in [China’s Xinjiang region, the home of the country’s Uyghur minority], involving everything from cotton and textiles to automotives and electronics. One industry in which Xinjiang excels is the global production of solar panels, as it produces about 45 per cent of the world’s supply of the key component, polysilicon. Research by Sheffield Hallam University in May concluded that this material had been obtained under a massive system of coercion.
Unsurprisingly, such revelations have prompted demands for action across the West. Shortly before Christmas, the US Senate passed legislation to ensure that American entities are not funding forced labor among ethnic minorities in the region.
[Siemens CEO] Busch though, is not such a fan of calls to divest from such supply chains on the grounds that — wait for it — an EU ban on forced labour could slow down its green transition which relies on imports of Xinjiang’s solar power panels.
Responding to [ comments by (Green) foreign minister, Annalena Baerbock about the need to take a tougher line on Chinese human rights violations] on Friday, the £5.8 million-a-year executive said that mistakes in China ‘cannot be resolved through a confrontational foreign policy,’ adding ‘If export bans are issued, these could mean that we can no longer buy solar cells from China – then the energy transition will come to an end at this point.’
Not unreasonably, Steerpike draws attention to this item on Siemens’s website:
In Nazi Germany, rearmament and the wartime economy dominated Siemens’ business activities, too. The company’s activities during this period also included the use of forced labor. Siemens has taken a clear position on this matter – repeatedly, responsibly and clearly.
Hmmm . . .
Meanwhile, from a portion of the website dedicated to ESG (a way of seeing how companies measure up to certain environmental, social, and governance requirements):
As one of the world’s leading technology companies, we need society’s trust and acceptance to achieve our goals. Therefore, integrity is the basis for every one of our actions, and what we expect of every employee, as well as our partners and customers. By prioritizing ethics, we ensure that our partnerships are transparent and that we mitigate any risks. And because of Siemens’ size and influence, we help set high ethical standards across the industry. This includes our supply chain. Our partners commit to a range of sustainability principles, including fair labor practices, anti-trafficking standards, the health and safety of employees, environmental protections, and fundamental human rights.
So that’s okay then.