De-Risking: How Germany’s Indo-Pacific Deployments Support Berlin’s Economic Strategy Towards China

CSDS POLICY BRIEF • 2/2024

By Maximilian Ernst

6.2.2024

Key issues

• Germany’s Indo-Pacific deployments support a China strategy that builds on an overall desire to de-risk from China.
• Berlin’s objective is to gradually decrease, rather than exclude or de-couple, China’s share in supply chains of key industries and critical infrastructure.
• The consistent military deployments to the Indo-Pacific on an annual basis emphasise security and economic cooperation with like-minded partners in the region.

Introduction

In autumn 2020, Germany published its first Indo-Pacific Strategy called the “Policy Guidelines for the Indo-Pacific” (henceforth “Guidelines”). The document defines Germany’s interests in the Indo-Pacific and prescribes avenues to achieve policy objectives in cooperation with regional partners. Among Germany’s objectives are to secure shipping routes, guarantee a rules-based use of the global commons, as well as climate and environmental protection. Since the publication of the guidelines more than three years ago, Germany has significantly upscaled its security-political engagement with the region, notably through the deployment of military hardware and personnel from all three traditional military branches (Army, Air Force, Navy) on a regular basis. Perhaps most visibly, the German Navy’s frigate Bayern conducted the Indo-Pacific Deployment 2021 (IPD21), operating in the Indo-Pacific from August 2021 to January 2022, which marked the first time a German Navy vessel has made the journey to the Far East in two decades. The frigate participated in multilateral exercises with partner navies, made port calls and conducted naval diplomacy with Germany’s like-minded partners in the region. Over the subsequent two years, the German Air Force and Army deployed to the Indo-Pacific and participated in military exercises with Australia, and the Air Force performed further visits to Singapore, South Korea and Japan. In 2024, the German Navy will again deploy to the Indo-Pacific, this time with two ships, for the IPD24. Further deployments to the Indo-Pacific, as well as participation in exercises by the Army and Air Force, are also already scheduled for the coming years.

Such consistent security political engagement in the Indo-Pacific region seems unlikely for a European country like Germany, which, unlike than the United Kingdom (UK) or France, does not possess overseas territories in the Indian and Pacific oceans. Germany, much like the rest of Europe, sees itself confronted with Russia’s revisionist imperialism in Eastern Europe. This implies that it must balance support to Ukraine against the urgent necessity to upgrade its own armed forces and stock up ammunition supplies to meet NATO requirements and to credibly deter Moscow from further aggression. Germany’s very recent decision to also deploy a frigate to the Red Sea in support of an EU mission to protect merchant ships from Houthi attacks adds further constraints to the German Navy’s force structure. Against this backdrop, Germany’s deployments of military hardware, combined with high-level visits of government officials alongside those deployments, suggest that Berlin is serious about its commitment to enhance cooperation with partners in the Indo-Pacific. Could the Guidelines be more than a lofty strategy document describing ambitious but unattainable policy objectives of an incumbent government?

Indeed, the Guidelines were published under the late (“grand coalition”) Merkel government and are concurrently pursued under the incumbent (“traffic light”) Scholz administration. As such, the Guidelines have the backing of the entire mainstream political landscape, save for the far-left and far-right fringes. It appears that Germany’s strategy towards the Indo-Pacific, complete with small but consistent deployments of military hardware, has staying power and will become a permanent feature of German foreign and security policy over the coming years. Importantly, the pursuance of traditional and non-traditional security interests, including environmental protection, climate- and economic security, beyond the Euro-Atlantic area, hint at an evolution of German statecraft that departs from post-Cold War, post-modern idealism. It instead adopts a realist assessment of national security interests and identifies partners, across the globe, who share these interests. Over the past three years, deployments to the Indo-Pacific were executed according to schedule in spite of a global pandemic, Russia’s full-scale invasion of Ukraine and, now, escalating tensions in the Middle East and the Red Sea. We can hence expect that Germany will continue its Indo-Pacific deployments, and more generally, intensify cooperation with like-minded partners in the region, in the foreseeable future.

This warrants a set of questions, on which this Policy Brief will shed some light: 1) what are Germany’s strategic and political objectives in the Indo-Pacific?; 2) what will Germany’s engagement towards the Indo-Pacific look like in the coming years?; and 3) how do Indo-Pacific deployments tie in with Germany’s recent China Strategy?

Germany’s “Guidelines for the Indo-Pacific” and the Chinese Elephant in the Room

Germany’s interests in the Indo-Pacific are primarily shaped by its commercial relations with the region, both as an import and export market for components and end-products, and as a destination and source of foreign direct investments. With about 60% of global economic output, the Indo-Pacific naturally ranks top in all European countries’ foreign policies. There is no uniform definition of the Indo-Pacific, and different actors project varying strategic concepts to delineate a geographically and culturally vast region that, depending on where one draws the borders, comprises up to half of the world’s population, about two thirds of global GDP and two thirds of the globe. Germany employs a comparatively broad conceptualisation of the Indo-Pacific as ‘the entire region characterised by the Indian Ocean and the Pacific’ (see p. 8). The 2020 Guidelines, authored by the Foreign Ministry with input from further departments, define Germany’s interests in and opportunities for cooperation with the Indo-Pacific. Specifically, the Guidelines outline the following German interests in the region: 1) peace and security; 2) diversifying and deepening relations; 3) neither unipolarity nor bipolarity; 4) open shipping routes; 5) open markets and free trade; 6) digital transformation and connectivity; 7) protecting our planet; and 8) access to fact-based information. (see pp. 9-10)

Against the backdrop of intensifying Sino-American strategic competition, the region’s geopolitical and military-strategic dynamics increasingly impact the economic security of Germany and its allies and partners in Europe. The document tacitly positions Germany in relation to the emerging great power competition between the United States (US) and China, although less decisively than other countries’ Indo-Pacific strategies. Furthermore, the European Union (EU), the US,France, the Netherlands, Japan and South Korea formulate their regional strategies in the context of the Indo-Pacific. One should note that the adoption of the term “Indo-Pacific” in a strategy document alone is interpreted by some as a position against China’s ambition to undermine the liberal international order. Beijing views the mere mention of the term “Indo-Pacific” as a strategic concept developed by the US and its allies to contain China’s rise. However, Beijing interprets any engagement by extra-regional actors in the Pacific and Indian oceans as a challenge to its hegemonic ambitions. In that sense, any European engagement or strategy document that carries so much as the term “Indo-Pacific” will be seen as a challenge in Beijing. Put bluntly: Beijing does not want Western countries to think strategically about the Indo-Pacific. Beijing seeks hegemony over Asia and reserves the right to treat the Western Pacific as its strategic backyard to which outsiders receive access only by China’s grace. Once this Chinese premise is understood, it becomes clear why the Chinese leadership opposes all Indo-Pacific strategies, be they from the US, Europe or Asian democracies.

All Indo-Pacific strategies share the common objective of strengthening and upholding the rules-based liberal international order. The authors of Germany’s Guidelines are conscious of this and note that pre-existing strategy documents by American and European allies differ ‘in terms of their objectives, emphasis on different policy fields, the importance they ascribe to multilateral approaches and, above all, with respect to the question of China’s involvement as a regional and emerging world power that, to some extent, calls the rules of the international order into question’ (see p. 8). They designate science, education, climate and economic cooperation as the key objectives with all nations of the region – including China –, and they explicitly avoid mentioning China’s hegemonic ambitions and aggressive posture towards regional states.

The Guidelines acknowledge the existence of the Sino-American rivalry and great power competition. However, they define policy objectives around it and treat China as just another country in Asia. China receives special mention as a nuclear power alongside India, Pakistan and North Korea, but that is it. It would be an exaggeration to diagnose the Guidelines with a “Voldemort Syndrome” on China – the country is mentioned about as often as other large nations in the Indo-Pacific. Still, as far as Germany’s 2020 Guidelines are concerned, China appears like a large elephant in the proverbial conference rooms of German policy-makers. There is no mention of the fact that China is a revisionist great power with the largest economy in Asia and the second largest in the world that seeks to undermine the rules-based international order. Nor do the Guidelines view China as a country that economically and militarily coerces its neighbours, militarises the South China Sea (SCS) in stark violation of international law and threatens the use of force to invade Taiwan.

More than Frigates: Deployments of the German Armed Forces to the Indo-Pacific

One year after Germany published the Guidelines, it sent a navy vessel, the F123 Brandenburg class frigate Bayern, on the IPD21. This deployment of military hardware can be understood as a first translation of Indo-Pacific strategy into policy. The Bayern left the North Sea navy base in Wilhelmshaven in August 2021 en route to the Indian Ocean via the Mediterranean and the Suez Canal, and it returned in February 2022. On its way, the frigate made port calls in Pakistan, Australia, Guam, Japan, South Korea, Singapore, Vietnam and India. The German frigate conducted numerous passing exercises with partner navies in the region, and joined multilateral exercises such as the ANNUALEX under the leadership of the Japanese Navy together with the navies of the US, Australia and Canada. It also participated in international missions by the EU (NAVFOR) and United Nations (enforcement of sanctions against North Korea).

The IPD21 constitutes a prime example of naval diplomacy. In addition to joint exercises and improved military-to-military relations with countries of the region, the presence of the Bayern was often used for visits of prominent, high-level representatives of the Armed Forces, such as the Chief of the Navy, Chief of Defence, or the Foreign Ministry’s Director General for Asia and the Pacific. Despite taking place under the conditions of the Covid-19 pandemic, the IPD21 was a successful endeavour through which the German Navy not only demonstrated its capability to deploy to the Indo-Pacific, but fostered cooperative ties with the navies of allies and partners in the region. That being said, the deployment would not have been possible without the help of Germany’s allies, particularly the US Navy’s 5^th and 7^th fleets, which provided logistical support in the form of sea-refuelling in the Indian and Pacific oceans. A recent agreement between Germany and Japan to facilitate the exchange of supplies and logistical support will become useful in future deployments in this regard.

Critically, the IPD21 was only a first step on Germany’s ambitious path to regularly deploy forces to the Indo-Pacific, exercise with partners and foster relations on an annual basis. Through Rapid Pacific 2022, the German Air Force deployed four A400M transport aircraft, three A330 multi-role tanker planes and six Typhoon Eurofighters via Singapore to Australia, to participate in the air combat exercise Pitch Black and the naval combat exercise Kakadu with the Australian Armed Forces and further like-minded partners. Altogether, around 250 German Air Force personnel participated in the exercise. On the way back to Europe, the German Air Force had a second stop-over in Singapore and conducted joint air operation exercises with the Singapore Air Force. A detachment of Eurofighters and one A400M proceeded to Japan and South Korea before returning to Germany. The German Air Force already announced that it will also participate in the next Pitch Black exercise in Australia in 2024. Furthermore, in 2023, the German Army, together with Navy Sea Battalion and Air Force elements, participated in the Talisman Sabre exercise, also in Australia, together with the Australian and US armed forces.

In 2024, the German Navy will return to the Indo-Pacific for the second Indo-Pacific Deployment, the IPD24, with two ships. One of the German Navy’s new Type 125 Baden-Württemberg-class frigates will deploy alongside a Berlin-class combat support ship. The exact route is not yet confirmed, but will likely be part of a trip around the world with a prior crossing of the Atlantic and stops on the North American East Coast before continuing the journey through the Panama Canal, the US West Coast and Hawaii on to Japan and South Korea. On the way, the German Navy will again participatein relevant exercises, such as RIMPAC, and support UN sanctions against North Korea. As in 2021, the German Navy ships will likely again pass through the East and South China Seas (i.e. the littoral waters of aforementioned elephant in the room: China).

Outlook: Germany’s Indo-Pacific Deployments Support a China Strategy Built on De-Risking

Whereas China is treated like just another Asia-Pacific country in Germany’s Guidelines, it is entirely absent in the deployments of the Bundeswehr. Originally, the frigate Bayern was scheduled to make a port call in Shanghai in 2021, but China eventually rejected the German request, resolving any inter-departmental disagreements that may have existed on the matter inside the Merkel administration at the time. Two years on, in July 2023, the Scholz administration published Germany’s first China Strategy. This document fills the void on China as far as German strategy papers are concerned. It identifies China as partner, competitor and systemic rival, in-line with relevant EU documents. It condemns economic and academic espionage originating from China, opposes ‘illegitimate interference’ and ‘acts of transnational repression’ (see p. 43)  by Chinese authorities and acknowledges that China’s close relationship with Russia presents an ‘immediate security concern for Germany’ (see p. 53). On the economic front, the strategy promises to de-risk, rather than de-couple, from China, to manage the economic relationship primarily through EU channels and to give greater importance to EU-China bilateral engagements.

De-risking is about reducing Chinese large – commonly state-owned or controlled – enterprises from supply chains that feed into critical sectors like health care, transport and communication infrastructure, defence and further emerging industries that will drive technological development in the coming decades, such as semiconductors and machine learning. All this is important and can only be achieved on an EU and transatlantic level. Nevertheless, de-risking from China is also, and perhaps most effectively, achieved by simply de-emphasising China. For many decades, China, with its emerging economy, huge markets and low labour costs, was a synonym for East Asia in the minds of many European business executives and policy-makers alike, leading to an overreliance on commercial relations with the “Middle Kingdom”. Europe’s and Germany’s vulnerability to Chinese statecraft was to a large degree homemade, and the remedy is as simple as the mistake: shifting the focus away from China and towards the rest of the Indo-Pacific.

The Indo-Pacific deployments of the German armed forces already realise this wisdom; originally by accident, when Beijing denied the Bayern a port call, but increasingly by design, as the Bundeswehr cooperates with the armed forces of Germany’s partners in the Indo-Pacific, such as Australia, India, Japan, Singapore, South Korea and the US, to name a few. Virtually everyone except China – and North Korea – is on the list of visits by Germany’s Navy, Air Force and Army. One may view the Bundeswehr as a trailblazer to flank Germany’s overarching policy objectives in the Indo-Pacific. De-risking from China is one of the main pillars of Berlin’s 2023 China strategy. The Indo-Pacific deployments of military hardware and personnel, and the avid participation in military exercises and missions, are the security-political pendant to intensified economic cooperation with all of Germany’s friends and partners in the Indo-Pacific: with everyone, but the Chinese elephant in the room.

The year 2024 marks the fourth year in a row in which the Bundeswehr deploys to the Indo-Pacific to exercise with like-minded partners in the region. The deployments of first one, then two ships, several planes, and a few hundred soldiers to the Indo-Pacific, mark a notable departure from a German foreign and security policy towards Asia that has for decades relied on traditional diplomacy, underwritten by economic policy. At the same time, these deployments are relatively small in scope. This makes sense if they are understood as a signal of support for like-minded regional partners with whom Germany shares interests on the global level, such as free shipping routes, environmental and climate protection, and more generally, a rules-based international order.