The latest data reveals a striking fact: Germany has overtaken Japan to become the world's third-largest economy. However, this honor did not bring Germany the joy it deserved. Last year, Germany's GDP growth rate was dismal to -0The fact that 3%, which ranks last among the world's major economies, has the German Green Party's economy minister Habeck frowning, and he openly admits that the performance of the German economy is really worrying. Against this backdrop, one wonders what the German chancellor is up to.
In the Russia-Ukraine conflict, Germany's diplomatic strategy has been overstretched and has been criticized. Eastern European countries ridiculed Germany's weakness in a playful tone, while Ukraine** sharply ridiculed Chancellor Scholz as a "pig's liver sausage", hinting at its weakness in international affairs. This series of events undoubtedly led to a sharp decline in Germany's influence in Europe, and the glory of the past seemed to be a thing of the past.
While Germany has long been the biggest beneficiary of cheap Russian energy, it has unexpectedly offered to shut down the Nord Stream pipelines amid Russia's invasion of Ukraine. When the pipeline was bombed, Germany did not actively investigate, but blindly followed the European Union to impose a ban on Russian energy. This move was undoubtedly a suicidal blow to the long-term prosperity of its industry, which has long been dependent on cheap energy from Russia. Unsurprisingly, Germany's industrial output fell by 15%, of which the decline in energy-intensive industries and energy industries is particularly significant. While the United States has played a key role in this series of events, Germany's surprise attribution of blame to China has raised questions about its diplomatic wisdom.
Recently, the Bundesbank released a set of data that was even more surprising: last year, German direct investment in China totaled 11.9 billion euros. Although German politicians have been calling for a reduction in the number of factories in China to reduce dependence on China, and to build factories in other countries to prevent China from taking market share, this call does not seem to have received a positive response from domestic capital. In fact, data for Europe and China is surging, soaring from €155 billion in 2018 to €396 billion in 2023. This trend shows that despite warnings from German politicians, investment continues to flow into China.
All this makes one think: as a traditional capitalist country, whose interests does Germany represent? Is it domestic capital? Or the general public? As it stands, it does not seem to represent either the interests of domestic capital or the general population. So, whose interests does it represent? Perhaps, this is precisely the question that Germany needs to reflect on. If Germany continues to pursue the so-called "values diplomacy", I am afraid that it is not far from the brink of decline.