When the national anthem sounded in Beijing's Great Hall of the People at just after 9 a.m. on Saturday morning at the start of the People's Congress, a riddle was floating under the red star in the hall sky, the solution of which could severely damage German business dealings with its most important trading partner: Was China in inaugurated the war against Ukraine?

Henrik Ankenbrand

Economic correspondent for China based in Shanghai.

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Should President Xi Jinping have been informed during the visit of his "best friend" Vladimir Putin at the start of the Olympic Games in Beijing, as suspected by Western secret services and governments, that Russia will invade Ukraine a few days after the end of the winter competitions, in particular Observers say that Germany and German industry are completely reassessing their relationship with their most important trading partner, China.

"Putin's war acts as an accelerator of the debate that has been going on for a long time in the boardrooms of German companies about how to deal with business in China," says Munich commercial lawyer Sabine Stricker-Kellerer, who also advises the federal government.

It is unlikely that companies will completely withdraw their business from the People's Republic.

"But there could be less new investment in China, and many companies are considering diversifying and setting up production sites in other countries."

The risk of close economic ties is revealed

But even if the rumors, as claimed by Beijing, that it knew about Putin's war turn out to be untrue, the German economy's dependence on China will now be an issue.

Even before the war broke out, EU Commission President Ursula von der Leyen had identified a new alliance between Russia and China, which wanted to implement the principles of “might makes right” and “coercion instead of cooperation” instead of the rule of law in the world.

If the already negative mood towards China in Germany deteriorates completely in view of its partnership with Russia, the high share of sales, which the German car industry in particular achieves in the People's Republic, should also become a risk.

According to economists at Deutsche Bank, the Kiel Institute for the World Economy (IfW) had already warned before the start of the war that “German companies were becoming dangerously dependent on the well-being of the Chinese leadership”.

Low growth, rising unemployment

For China, the debate comes at an inopportune time.

At the six-day session of the sham parliament in Beijing, the not freely elected deputies are supposed to nod off the government's plans, which are intended to get the ailing economy back on course for growth, as they do every year.

In the fourth quarter of last year, their performance had only increased by 4 percent year-on-year - after Beijing cut off huge, highly indebted real estate groups such as Evergrande from further loans and thus plunged the construction industry, which is important for the economy, into a crisis.