With China and the U.S. fixated on each other, Europe is at risk of being paralysed in between and needs to steer its own agenda, German Economy Minister Robert Habeck said on Wednesday.
"If we had to choose between the U.S. and China, we would have extreme problems," Habeck said as he gave the keynote address to mark World Economy Day at the German Chamber of Commerce and Industry's (DIHK) world conference.
The economy minister said the only option to prevent this from happening is to shape a European trade agenda. "Trade agreements are part of it, in my view," Habeck said.
"We must work to ensure that multilateral organizations work and that we keep free trade," he said, calling for a strengthening of international bodies such as the World Trade Organization.
The economic conflict between China and the U.S. is shaping international trade flows, he said. "China wants to attract European investment and German investment, hoping that Europe doesn't completely ally itself with the U.S.," Habeck said.
German companies are increasing investment in China even as the German government, the European Union and the G7 want to "derisk" their relationships with Beijing, he added. Meanwhile U.S. companies are trying to gain independence from China, he said.
"The economic relation with China is immensely important for the economic ministry," Habeck said, arguing in favour of de-risking. "An economic decoupling from China is not in our interest," he said.
(Reporting by Maria Martinez; Editing by Jan Harvey)
