“Cooperation” with China: The Gap between Rhetoric and Reality
# Germany

by　Satoshi MORITA

(Originally published as a Japanese article in International Development Journal, No. 815, November 2024.)

『国際開発ジャーナル』2024年11月号掲載記事

Executive Summary

1.Overview and Rationale

Since the 2000s, China’s rapid economic growth has propelled its GDP past Germany’s, making it the world’s second-largest economy. And yet China still ranks among Germany’s top three ODA recipients — a seemingly contradictory position captured by the label “developed developing nation,” which is the starting point for this article. Why does Germany continue to provide aid to a China that has become economically self-sufficient? This article discusses that question from three perspectives: Germany’s decentralized ODA system and the scale of its financial flows, the shift in Germany’s China strategy, and its posture toward the EU.

2.Key Discussion Points

2-1   A Decentralized ODA System and the Reality of Cooperation with China
Germany’s ODA is administered through an unusually dispersed structure spanning BMZ, the Federal Foreign Office (AA), GIZ, KfW, DEG, and sixteen federal states and political foundations, among others. While Germany’s ODA to China is officially said to have ended in 2009, it has in practice continued in the form of Financial Cooperation through KfW and Technical Cooperation through GIZ – with academic cooperation tied to hosting Chinese students in Germany (scholarships and imputed student costs) also accounting for a non-negligible share. That said, gross disbursement figures in OECD statistics overstate the actual (net) financial flow, meaning Germany’s ODA to China is smaller in practice than the headline numbers suggest.

2-2   Shift in China Policy: From “Aid Recipient” to “Partner”
As China’s economic and political weight has grown, Germany has come to frame China as an “important trading partner” and a “global player.” Germany’s 2023 “Strategy on China,” following the EU’s lead, explicitly describes China as “simultaneously a partner, competitor and systemic rival.” This layered characterization lies behind Germany’s continued cooperation with China since 2010, particularly in climate and the environment, trade and investment, legal systems, and trilateral cooperation.

2-3   Balancing Act with the EU
Germany’s posture toward China continues to oscillate between EU solidarity and pragmatic bilateral cooperation. When President Xi made his state visit to France in 2024, Chancellor Scholz’s decision not to join the trilateral meeting with Macron and von der Leyen, along with China’s lobbying efforts over EU tariffs on electric vehicles, were read as signs of discord within the EU’s collective stance. The timing of China’s eventual “graduation” from the list of ODA recipients, along with the trajectory of U.S.-China tensions, remain unresolved variables that will shape the future direction of Germany’s ODA policy toward China.

3.Implications and Insight

Statistics on “aid” alone cannot capture the real nature of the Germany-China relationship. The net flow of loan financing is, in effect, running from China to Germany, and most technical cooperation spending goes towards personnel costs on the German side. In other words, by Germany’s own account, ODA to China is no longer “development assistance” in the traditional sense; rather, it has transformed into a pragmatic diplomatic tool of “international cooperation” to maintain policy dialogue channels with China on issues such as climate action and the shaping of global governance. Going forward, Germany will likely continue to seek a balance within its inherently contradictory stance toward China – as partner, competitor, and systemic rival – while working to stay coordinated with the EU.

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