Germany’s economy minister said on Tuesday the government was working on a new trade policy with China to reduce reliance on Chinese raw materials, batteries and semiconductors, vowing to end “naivety” in trade relations with Beijing, Reuters reported.

German Economy Minister Robert Habeck at the economic forum in DavosPhoto: Markus Schreiber/AP/Profimedia

Sources told Reuters last week that the Economy Ministry was considering a number of new measures to make doing business with China less attractive. This is the first time a minister has made it clear that a tougher line is turning into political measures.

Robert Habeck told Reuters that China is a desirable trading partner, but Germany cannot allow Beijing’s protectionism to distort competition.

“We cannot afford blackmail,” he said in an interview.

Habek did not fully describe the new measures, but said they would include closer scrutiny of Chinese investments in Europe, such as infrastructure.

China has been Germany’s largest trading partner for the past six years.

But the center-left government has taken a tougher stance on Beijing than its center-right predecessor, worried about Germany’s dependence on Asia’s economic superpower.

Habeck said that Germany needs to open up to new trading partners and regions, as many sectors are heavily dependent on sales to China.

“If (the Chinese market) were to close, which is unlikely at the moment … we would have extreme sales problems,” Habeck said, adding that the economy ministry is contributing to the new German-Chinese policy.

“And from this you will see that naivety is over,” he added.

Berlin also wants to be more critical of Chinese investment in Europe, he said, adding that Europe should not support China’s Silk Road initiative, which aims to acquire strategic infrastructure in Europe and influence trade policy.

For example, Habek has voiced his opposition to China’s Cosco’s plans to buy a stake in container operator Hafen Hamburg, Germany, signaling concern that Chinese takeover deals are spreading from technology to other industrial sectors such as logistics.

“I’m leaning towards not letting that happen,” he said.

China did not join the West in imposing broad sanctions against Moscow after Russia’s invasion of Ukraine, but it also did not support Moscow’s actions because Beijing needs to maintain trade relations with Europe.