BERLIN — Germany should become a leading semiconductor producer, Chancellor Olaf Scholz said Monday, while also stressing the need to reduce dependencies on China and urging Beijing to refrain from aggression against its neighbors.
Scholz’s remarks came shortly before the chancellor reached a deal Monday on a more than €30 billion investment by U.S. chipmaker Intel in Magdeburg, following a meeting with Intel CEO Pat Gelsinger.
Speaking earlier at the German Industry Day conference in Berlin, Scholz lauded efforts to boost the EU’s share in global semiconductor production and said that “every third chip produced in Europe comes from Saxony,” a state in eastern Germany, while adding that big chip producers are planning further investments in Germany.
“If these are implemented in this way — and we are working on this — then Germany will become one of the world’s major semiconductor production locations,” Scholz said, adding that this would also help the EU to diversify its supply chains, thereby reducing dependency on China and other Asian countries.
Yet the €30 billion deal with Intel also involves about €10 billion of German state subsidies, which could be seen as controversial at a time when Scholz is urging cuts to public spending.
In his speech Monday, Scholz said that “after unprecedented years of crisis with unprecedented borrowing, it is our duty to lead our country into a solid future,” which would also mean cutting some subsidies and other financial support programs.
Turning to China and its increasingly aggressive stance toward Taiwan, Scholz urged Beijing to “not forcefully change the status quo in the East and South China Seas” and to “abide by international rules.”
The chancellor also stressed the necessity “to avoid dangerous economic dependencies” on China and argued that companies should reduce risk in that sense — but should in no way give up on China’s huge and lucrative market.
“Derisking: Yes. Decoupling: No,” he said.
Scholz will meet Chinese Premier Li Qiang for a dinner in Berlin later on Monday ahead of German-Chinese government consultations that officially kick off Tuesday. This includes a forum on economic and technological cooperation, as well as talks on climate protection and the shift toward renewable energies.
The chancellor argued that there was a “need to work with China on global issues” and that Germany and the G7 club of leading democracies had “no interest in impeding China’s economic rise.”
