German Port City Duisburg Abandons "China City" Label

The Lede: The German port city of Duisburg is making efforts to shift its “China City” branding as Europe trends toward ‘de-risking’ from China

What We Know:

• Duisburg has been breaking its links with China by cutting down on once-frequent visits by Chinese officials and business delegations and re-acquiring a 30 percent share of the Duisburg Gateway Terminal from the Chinese shipping company Cosco.
• A memorandum previously signed in 2018 with the Chinese technology company Huawei to build infrastructure for government service portals has not been renewed and the copy of it was deleted from the city’s website.
• This comes shortly after the controversy surrounding the recent purchase of a significant stake in the port of Hamburg by Cosco. A map accompanying leaked documents from the U.S. Joint Chiefs of Staff marked all of Europe as having “minimal receptivity” to China except Germany and Serbia, which were assessed to have “moderate receptivity.”

The Background: Duisburg had been a key city in the industrialized German Rhine-Ruhr region before the decline of its steel and mining industry. It had placed its bets on China’s rise in the last decade with the offer of its inland port, a visit from Chinese President Xi Jinping in 2014, and the transit of about 80 percent of trains coming from China to Europe. Germany accounts for the majority of EU investments in China but is crafting policies to control outbound ties and often voices criticism.

Likely Outcomes:

• As the EU’s biggest economy and with significant economic ties to China, Germany will likely play a major role in pointing the rest of Europe toward its future relationship with China. Its insistence on ‘de-risking’ rather than ‘de-coupling’ from Beijing is the catchphrase of European and Western leaders regarding their China positions. Sentiment toward China will continue on a negative path, but Germany, Europe, and Western countries, in general, will maintain economic relations, especially in mutually beneficial and less sensitive industries.
• The U.S. will make efforts to influence European leaders to take a harder stance on China as leverage in its own geopolitical rivalry. China, on the other hand, will seek opportunities for cooperation and foster ties in more receptive economies, although the options are shrinking. Beijing will be keeping an eye on Germany’s new upcoming China policy and updates on Europe’s overall sentiment. It will also look out for economic vulnerabilities and gaps in the ‘de-risking’ narrative.

Quotables:

“There are rules in our contracts, and you have to follow these rules. If you don’t do so, it’s like in soccer, there’s a yellow card. Sometimes the second yellow card, but then follows the red card: You’re kicked out.” - Markus Bangen, CEO of Duisburger Hafen AG

“Beijing likely does not fully recognize the extent to which European partners are wary of the PRC’s intentions, and believes its changing rhetoric is sufficient to frustrate transatlantic ties. European officials likely will aim to secure their economic interests while increasingly aligning with U.S. views on the PRC.” - leaked U.S. Joint Chiefs of Staff briefing documents

Good Reads:

Germany’s ‘China City’ doesn’t want you to call it that anymore (Washington Post)