China’s New World Order - How dependent is the West? | DW Documentary

The day many have long warned about would begin with terrifying news: China has invaded Taiwan. Experts are already confident of how China would proceed: Taiwan's navy and air forces would be destroyed by bombing, and tens of thousands of Chinese soldiers would rush across the Taiwan Strait. China has made no secret of its ambitions.

Don't pretend that Taiwan is not part of China. I think we can clearly see that states are linking up to redraw the world map. A war between Taiwan and China may seem very far away for Germans but the consequences for the country would be catastrophic.

We can be blackmailed, yes. We'd have supply shortages, mass unemployment. The market crash would hit both economies very hard.

Few countries have made themselves so dependent upon China. This is when we, as Germans, have to ask ourselves Is this what we want? Germany has made itself vulnerable.

Why? We wanted to find the causes, and the answers: In China, Germany, and Taiwan. Is there a way to end this dependency?

There are many signs that things have gone awry that Germany's dependence upon China has become dangerous. One such warning is the story of six-year-old Anton, from Berlin, and his doctor, Malik Böttcher. He never really used to get sick.

When he had a cold, or a fever, he'd still go play on the playground. Anton got a serious infection in early May. A television crew happened to be filming his doctor's office and documented Anton's visit.

We examined him and found that he had bronchitis, verging on pneumonia. We started him on antibiotics. The antibiotics were initially available at the pharmacy but too few and in too low a dose.

The line between life and death can be thin. It can be as small as a tablet. When it's there, you don't think about it.

When it isn't or as in Anton's case there's not enough of it, things become dangerous. The reason for the shortage: China wasn't then supplying enough cephalosporins; antibiotics. Without China, Anton was in peril.

When the Chinese stop sending us pharmaceuticals, we run short on cephalosporins cephalosporins are very, very important, especially for severe infections. That means people will die? Yes.

There's no one to tell you Don't worry, antibiotics will be available again soon. Shortages become the new normal? Dr Böttcher tried to circumvent the Chinese problem by prescribing a lower dose but it didn't work.

Anton was admitted to hospital with severe pneumonia shortly after these videos were taken. The dependency on China has been tolerated for years. The relationship was so unproblematic that we were never concerned that it could be used against us.

But we're seeing how China has changed and now we have to change. Just how much China has changed became evident in mid-October, at the New Silk Road forum in Beijing. Xi Jinping side-by-side with a man who with an international arrest warrant: Vladimir Putin.

For Xi, the brutal war of aggression against Ukraine is no reason to avoid him. Quite the contrary. .

. All these external factors are common threats; and they strengthen Russian-Chinese cooperation. We had to remain outside and like most of the Western media follow the opening celebrations onscreen in the press center.

For Xi, the New Silk Road is a way to expand China's power and influence. China promises gifts but demands allegiance. Xi threatens anyone who refuses to comply.

Those who see the development of other states as a threat, and consider economic inter-dependencies a risk, don’t benefit, and do not help improve their countries. Xi shares Putin’s fantasy of great power. They both want to incorporate other countries into their respective empires.

Taiwan is to Xi what Ukraine is to Putin. Xi's goal is Taiwan's 'return to the motherland'. By force, if necessary.

Taipei's National Revolutionary Martyrs' Shrine commemorates the victims of the civil war: When Republican and Communist Chinese killed each other. Concern over a return to that conflict can be felt everywhere here. The small democratic island state is now amassing arms to deter the constant threats from its out-sized brother, The National Security Council greets us in Taiwan’s presidential palace.

Wellington Koo has the challenging task of protecting his island from China. China wants unification with Taiwanese territory, and is making no secret that it will take any step imaginable to do so. But the Taiwanese have know that dictatorship and democracy are incompatible.

Ever since the Republican troops fled from the Communists here in 1949, China has been demanding the return of what it sees as a renegade island. Around ninety percent of Taiwanese reject the notion. Most trust that their government will do everything necessary to protect them.

For some, though, that isn't enough. . .

Good afternoon, I'm Chuang Yuwei. I came back from Ukraine six months ago. The 52-year-old is a tour guide in Japan, but in March he decided instead to travel to the front.

This is the gun that I fought with in Ukraine. Chuang keeps the gear he used as a member of the International Legion in Ukraine in a military club in Taipei. The Ukrainian flag.

If you survive, it’s a souvenir. If you die, it's draped over the casket. One Taiwanese soldier has died in Ukraine.

But Chuang brought more than just the Ukrainian flag home with him: Courage also accompanied him back to the island nation. Before I went to Ukraine, I didn't know if we could resist the Chinese for three days, three weeks or three months. After fighting there, I believe that if Germany, France, Great Britain, and the United States are ready to support Taiwan with weapons the way they support Ukraine we can beat China.

Chuang is preparing for a return to the historic civil war. Today he's meeting with others who feel the same way. That all seems a long way away under the autumn sun in Munich.

Volkswagen wants to show its best side during an automotive show. But something is different, something casts a cloud over the industrial powerhouse. Volkswagen's electric cars are selling poorly in China the world's biggest car market.

Once the biggest brand, VW is being dethroned by Chinese rivals. And one of them, BYD, has set up directly opposite them. An automotive duel on Munich's grand boulevard.

Everything is on the line for VW. No other German company is so dependent upon China. Electric Chinese cars in the pole position is an existential threat for Volkswagen, and inspiration for China's car-makers.

We probably offer something a bit different than German manufacturers. In China, digital options are very important. I don't think they believed in electromobility at all.

Volkswagen or GM, they were dominating. But what we see today is that Chinese carmakers have over sixty percent of the market in electromobility. Pieter Nota at the time BMW’s head of Customer, Brands, and Sales inspects China's e-cars.

German arrogance towards Chinese models was once legendary. But now managers are thronging to see the Chinese and the proof of their own shortcomings. Wolfgang Porsche, automotive heir and owner of VW, is here with VW CEO Oliver Blume.

We are still the strongest carmaker in China. It’s crucial that we now succeed in the transformation to electromobility. If the Chinese say 'German cars are uncool I'd rather buy a BYD', then VW will just get twenty or thirty percent of its profits from China.

That would of course be a disaster for Wolfsburg. In the large exhibition hall in Munich, an alarmed 'who's who' of German business moves into place: the Chancellor alongside the car magnate. Chancellor Scholz rushes to Munich to support the German car industry.

The Chinese offensive is already damaging on this side of the world: German profits aren’t what they once were. And when profits wane, so do jobs. The mobility transformation is a big job, but it's a team effort.

I've come here today as part of that team. That 'team' is fighting a worthy opponent. China's e-cars are cheap because Beijing subsidizes them.

Germany could retaliate with punitive tariffs across Europe. That's the idea behind our China strategy; To create a level playing field and to say If you protect your markets, if you provide subsidies, so will we. We demand equal opportunities for all.

We won't be pushed off the playing field. But would Germany dare? Would Europe risk engaging in a trade conflict with China?

Suddenly the automotive conference becomes something else. Greenpeace activists crash the party. Bodyguards swarm around Scholz.

While the activists decry climate change, it may be more than just the climate that’s changing. Maybe an entire industry. Maybe the German economic model.

Trade with China has long been a party. Former Chancellor Angela Merkel called Beijing a 'strategic partner'. The principle: Germany supplied engineering and China provided cheap goods.

We thought an authoritarian state wouldn't allow the freedom and creativity of a democracy. That's why trade was easy with China; because China would always try to copy what we exported. They'd always be one step behind us.

A massive miscalculation. Trade with China was once highly profitable for Germany. But China has now caught up and, in some areas, even overtaken.

We've reached a point where the balance is shifting. Chinese imports are increasing, our Chinese exports decreasing. The balance is shifting towards China.

This is when we, as Germans, have to ask ourselves Is this what we want? The German business model is over. What do you see as the cause?

Well, it’s because we import cheap products from China, cheap gas from Russia, do business all over the world, and the Americans pay for our security. That's over now. Corona, and Russia's war against Ukraine, have shown just how dependent Germany is on global supply chains.

But it’s even more dependence on China than Russia. What lessons has Robert Habeck, Germany's economy minister, learned about global trade? We had a fifty-five percent gas dependency, and we managed to keep the national economy running.

Ninety, and it wouldn't have been possible. Ninety percent would have pulled the rug out from underneath us. Ninety percent.

That's how dependent Germany is on China for certain medicines and raw materials. If it comes to a conflict with Taiwan, ties between Germany and China will change overnight. A war of aggression would result in sanctions against China.

The world's most important trade route would be cut. Between one third and half of all global goods are shipped through the Taiwan Strait. None of that would arrive.

We'd have supply shortages, and face mass unemployment. The German government has created a new China strategy. The goal is 'de-risking'.

Less risk around China, less naivety. But what does that mean? How would it work?

Taiwan has been hedging its bets with China for years. The ace up its sleeve? Computer chips.

If Taiwan's foreign trade were interrupted, it would be a major disaster. Not just for Taiwan, but for the whole world, because Taiwan produces sixty percent of the world's semiconductors. The Taiwan Semiconductor Manufacturing Company is one of the most important in the world.

Its highly successful product even has its own museum, and can be found in refrigerators, cars, and mobile devices around the globe. The TSMC museum commemorates the 'Seven Fathers' of Taiwan's electronics industry: Managers and government officials who met in a soy milk snack bar fifty years ago and made a groundbreaking decision. Kristi Xu is an economist.

She knows TSMC inside-out. Over a soy milk, she reveals the founding fathers' plan: Taiwan should concentrate its expertise on one product one which could not simply be copied by neighboring countries. The plan received government support and became a complete success.

The world now depends on Taiwan for semiconductors. The production is uniquely sophisticated. It's very ironic, but even if they were to take TSMC, it would just be the factory, the building.

Because people have feet, and most of the senior engineers probably have a green card. They can leave easily. There would be no way for that operation to continue.

Neither China nor the rest of the world could weather a stop in the supply of semiconductors. China has to think twice before actually attacking Taiwan, and the international community would do anything to prevent a war with Taiwan. Taiwan created a silicon shield: A shield of semiconductors.

And Germany? It needs its own silicon shield. There is no backup for the medicines Anton urgently needs.

No alternative to the antibiotics. Anton's treatment isn't working. Anton's parents are forced to take him to hospital with severe pneumonia.

His oxygen levels were very low. Anton was actually in very bad shape. He had trouble breathing, trouble walking.

He didn't want to do anything, he lacked all strength. If you can't get antibiotics, it's just bad. It's very painful as a parent, being unable to help your child.

There's nothing there to help them. But antibiotics used to be produced in Germany. Penicillin production started in a Frankfurt suburb in 1950 and, after a few years, could meet all of Germany’s demands.

This medicine will save the lives of countless Germans in the years to come. Think about how much penicillin and cephalosporins were manufactured in Höchst from after the Second World War and into this millennium. At some point, the Chinese thought We don't like that.

We want the market to be dependent on us. They flooded the market with substances at dumping prices. That means China made sure that production in Höchst ended?

Yes. The Höchst facility is now just an industrial monument. Antibiotics haven't been produced here since 2017 only the price mattered.

Germany’s dependence on China quickly became apparent. A boiler exploded in an antibiotics factory in Eastern China in October 2016. Qilu produced piperacillin, an antibiotic, at the facility.

And Germany quickly lacked the drug. Chinese manufacturers had won the supply war using extremely low prices. Cephalosporin production is now concentrated in just three large factories.

We ask the Chinese companies for comment but they refuse. We're seen as corporate spies. The companies use popular wording to avoid prying questions from journalists; Foreigners infiltrating China, The whole country is fighting spies, the companies can’t address political topics, Too sensitive.

This is the answer from Qilu, a major Chinese antibiotics company: We have no interest in working with foreign media. We have no external communication with foreign media. Goodbye!

We travel to one of the cephalosporine plants in Shanxi province. Qilu's European exports increased by one-hundred-and-thirty percent last year. One employee agrees to talk to us at the main entrance.

We produce cephalosporins. Our products go around the world. I'm very proud of that!

Our presence doesn't go unnoticed. A discussion with security staff at the main entrance. Filming prohibited.

China wants make others dependent on them while remaining autonomous themselves. De-risking in China even has its own name: dual circulation. To prepare itself for a trade war, China wants to boost domestic consumption, and reduce its own dependence upon exports.

But German corporations are risking even more. Investments into China continue to grow. I believe that there are still some in the economy saying we just want to increase profits with China but they're not also trying to minimize risks.

Volkswagen wants to stay in the race and has invested two-point-four billion euros into a project with Horizon Robotics. The Chinese are the market leaders in self-driving cars. We want to offer the customer the best.

We're just using the best local solutions. It's expensive. VW hopes its Chinese strategy will run as predictably of many of its cars.

We'll have to replace the Chinese market eventually, because our companies will no longer play the role they have for the last twenty years. Even less well known companies are failing to adjust. Suppliers like Neue Zahnradwerk Leipzig and its one thousand employees.

Hubertus Bartsch built the company over that last two decades and added a plant in China eight years ago. Volkswagen's Chinese problems have become his too. The best times are when my brain isn't working at night.

Believe me, I have slept relatively little in recent years. This year, too. His company traditionally produces parts for combustion engines.

But with e-cars advancing, especially in China, can Bartsch make the transition? And what will happen to Volkswagen his most important customer? Will a struggling VW still need his products?

Small and medium-sized automotive businesses are under extreme pressure. Moving from the combustion engine to the electric car. Some certainly won’t make it.

Bartsch currently has the feeling that he's OK. He only saw his Chinese colleagues on the screen during the pandemic but in 2023, he can finally visit Tianjin again. He's nervous.

We’ve accompanied Bartsch before, back in 2015, when he opened his fifty-million-euro Chinese factory. He used his passport then almost as often as his credit cards as he commuted between two worlds. Attitudes were different about China.

We're amongst the few private investors. It's not just our passion, it’s part of our existence. It has to work with China?

Yes, it will work. Bartsch has been here for eight years now. His passport is no longer a familiar sight.

China seems farther away now if only because of Corona. It was a long, exhausting period. I'm very surprised that we're in such good shape.

The employees, the whole team has kept this business running on their own. The pandemic could have served as a warning on dependency what happens when one is suddenly cut off from supply chains, or one's own investments. My assessment is that German companies operating in China must know that their investments maybe treated completely differently there than in constitutional states like Europe.

That their assets could be seized? That's not just a theoretical possibility. Bartsch doesn't want to hear about de-risking.

There's also de-industrialization. Everything starting with 'D' is going downhill. We are very strongly organized in China, but our company's bottom line is to make sure our risk in China remains tolerable.

China's aim is to minimize risk to itself. It sees itself in a global competition with the US. Dominance in certain raw materials is at the heart of Beijing’s strategy.

Yunnan Province, Southwest China. We're heading for one of the Yunnan Chihong company's mines, one of the biggest producers of germanium in the world. The corporate video showcases its success stories.

germanium and gallium are extremely important in the production of semiconductors. Germany has made itself vulnerable to extortion by becoming dependent upon rare metals. A good half of its gallium comes from China, and over eighty percent of its germanium.

China has restricted their export since August 2023 to get even with the US trade sanctions. The trade war is also affecting Germany China is no longer supplying germanium and gallium. The Yunnan mine descends two kilometers into the earth.

Chihong didn't respond to our request for an interview. We find barbed wire and a warning sign at the main entrance: Strictly forbidden foe unauthorized persons and vehicles! A security guard appears immediately.

We again request an interview. I'll have to ask the main office, they make the decision. You're not allowed in now.

The mood is tense. The security guard is visibly uncomfortable with our sudden appearance. The company doesn't want to talk to us.

Rejections from government agencies, too. Only Victor Gao, Vice President of the 'Center for China and Globalization', an unofficial mouthpiece of the Communist Party, agrees to be interviewed. China has absolute dominance in rare earth and metals.

China still has two dozen aces up its sleeve. We have no problem with Germany. But if the Federal Republic of Germany were to follow the USA with their unjustified sanctions against China, then exports to Germany will just be as regulated, like the Chinese government is already doing this as far as the rare metals gallium and germanium are concerned.

Germany also used to produce gallium on its own here in Stade, near Hamburg. But only until 2016. Stade’s Gallium then became too expensive.

There's the political question is the production of gallium in Germany worth the effort, to ensure supply, to ensure competitiveness. . .

? For the semiconductor industry, those questions seem to have been answered. In March 2023, both the president of the European Commission and the German chancellor broke ground on a new semiconductor factory for Infineon in Drsden.

Semiconductors are often referred to as the oil of the 21st century. The one raw material, so to speak, on which almost everything else depends. By 2030 we want, working together with industry, to double Europe's share of the worldwide semiconductor production, up to twenty percent.

Since the semiconductor market is developing so rapidly, that means that we need to quadruple our current capacity. The EU has provided forty-three billion euros for semiconductor subsidies. That also makes Drsden attractive to TSMC.

Semiconductor companies would be foolish to ignore such generous public investment. TSMC had once invested significantly in China. But the semiconductor industry is now part of Taiwan’s national security.

We're thinking a lot about the economic security of semiconductor design. We respect the global position of the company, but Taiwan's lead in this industry must remain intact. Most modern production processes and research have to stay in Taiwan.

The latest investments by TSMC all went to closely allied countries. A coincidence? No, it's not a coincidence.

That means we agree to develop a global network. But to protect the supply chains, TSMC only goes to countries with similar values. Industrial policy, there and here.

TSMC hopes to be producing semiconductors on this green meadow in Drsden beginning in 2027. The most advanced chips will still be made in Taiwan but earlier generations will be made here to supply the European automotive industry. The Taiwanese want to invest ten billion euros.

About half of it subsidies. Money well spent for Germany? We’re sort of lying to ourselves.

The impact we're currently seeing in Europe will not fundamentally change the global industry over the next ten years. Although the chip can be manufactured in Drsden, Germany remains dependent on Asia for rare metals, soldering, and packaging. Germany’s economy minister disagrees.

First of all, you have to start somewhere; semiconductors will be everywhere soon. We would be well advised to produce at least a part of what we consume ourselves. Sometimes I don't understand it myself: There are major concerns about Germany's attractiveness for industry.

But when companies come here and build, or want to build, for the leading industry over the next few decades there’s criticism. Germany is at least trying to become more autonomous. But Chinese high-tech has long stood at the center of German communications – operating German mobile networks and critical infrastructure.

Can that be de-risked too? Maybe that’s the error in our de-risking, because we act like the motivation is peaceful. We just need to de-risk some.

Minimize the risk some, diversify some. As if the Chinese leadership wouldn't notice. As if they aren’t interested in the exact opposite.

China doesn't want to be de-risked. When the German government is determined to shoot its own feet, be my guest. We can't stop you.

We can't stop people from doing all the stupid things which will inflict all the damage, injuries and losses to the German people. But I personally hope that the German government, as I have always perceived them, will be smarter and wiser. Black swans supposedly stand for China's resilience.

According to superstition and Huawei's company history, the birds symbolize an unforeseeable event with serious consequences. Huawei says the misfortune and threats they've face have made them even stronger. It's why the black swans are fed and lovingly cared for on the company campus.

The animals are supposed to continually remind the staff to be ever-vigilant. The future is possibly as unimaginable as Huawei's corporate campus where the Heidelberg Castle, Oxford University, and palaces from Bologna and Granada have all been reconstructed according to the wishes of Huawei's founder. A tribute to Europe's inventiveness.

China's mega-tech company is researching and developing behind these facades. We were invited on a tour. Here we are in Heidelberg and this is a driverless car!

The tech company is clearly making an effort to appear open and transparent on German television. Wined and dined by Carsten Senz, Huawei's spokesman for Germany who usually works in the real Düsseldorf. The only reason Huawei exists is to serve our customers!

I know it sounds like a marketing slogan, but it isn't. Huawei's self-promotion is aimed at the federal government. There's another black swan in the room.

Berlin views Huawei's G technology as a security risk, and fears China could install malware and spy on Germany remotely, perhaps even switching off networks and critical infrastructure. Preposterous, says Huawei. We as the supplier have no access, neither remote access to data in mobile networks nor control of mobile networks.

Those are controlled by network operators. This kind of espionage and sabotage is more science fiction. But that fiction like the fear could become reality.

China's national security law requires companies to answer to the Party and the state. The US has long since outlawed Huawei components. Banning Chinese technology in Germany could have a cooling effect throughout Europe.

We don't want to lose any country as a customer especially not the biggest market in Europe, the German market. If you can survive and excel on the German market, you can also do that in many other markets. German telephone companies are also concerned about possible restrictions, threatening to sue Berlin for damages.

They’re naively ignoring the security concerns. Like carmakers, they just want relations with China to remain unchanged. The pressure on politicians is enormous.

I myself have always made it very clear that risk minimization also means not including technology from China that makes our own infrastructure vulnerable. We have to have the self-confidence to say we won't let anyone pressure us. Which they apparently can: Germany is now seeking compromise.

Only a small but significant part of the Huawei technology will be banned, with more transparency demanded from China. De-risking light. Germany's China strategy now lists the country as a partner, competitor, and systemic rival.

In Taiwan, people are happy about anything that adds distance to China. It gives them hope that Germany would, in the event of a conflict, be steadfast on the side of democratic Taiwan. We would like to see that Germany is ready to use their warships in Asia-Pacific and to hold military drills in the Indo-Pacific region, as they have recently.

But would international help come at all? Many aren't counting on it. With military discipline, they meet weekly at the open-air stage of Taipei's Da'an Park.

We're hoping we'll be able to demonstrate our determination to fight back. We can't expect other countries to help us if we don't show the will to do it ourselves. They may have forgotten their wooden rifles today, but not their enthusiasm.

Self-defense groups now exist all over the country. Young Taiwanese no longer have an emotional tie to the People's Republic and want to be prepared for the worst case. Chuang Yuwei is their star guest today.

The man who fought in Ukraine last year is now lifting weights here today. He becomes emotional at the end of a long evening. He's singing the Ukrainian national anthem.

Slawa Ukraini! Slawa Taiwan! Whether China will really attack Taiwan can't be known but Taiwan is preparing for it.

Is Germany? What we need to do in Germany is become more independent and position ourselves against China. I believe that will ultimately help create a better relationship with China.

Becoming less dependent and less vulnerable is going to be expensive. We have to again be able to provide the basics for our population. Germany isn't simply at China's mercy.

China needs the European market, too. And China also needs European imports. In Berlin, Anton and his father are back at the doctor's.

Fischer-Kubacki family please. Anton recovered in the hospital. His lungs are healthy again.

I'm so glad this didn't end differently. But you don't want to ever be in a situation like this again. It causes frustration and anger that it could even come to this.

Do you still remember what it was like when you had to go into the hospital? Yes, even for one night. I didn't want to go to the hospital.

How are you doing today? Good. For Anton, things have turned out for the best.

Dr Böttcher is now stockpiling medications that his patients no longer need. Should things become scarce again he might have something in the cupboard. Vulnerabilities sometimes only become apparent when something happens, like with Anton.

Moments when a turbulent world crashes into the life of a six-year-old. But dependence is not a matter of fate. We create our dependencies and can reduce them.

If we want.