On July 5, 2023, Asia Society Japan welcomed the German Ambassador to Japan H.E. Dr. Clemens von Goetze to the Ambassadors’ Circle. He talked about Germany’s strengths, challenges, opportunities, and the long-standing German-Japan relationship growing stronger in this challenging time. Von Goetze also discussed Germany’s immigration and energy policies as well as relationships with China, Russia, and the United States. Jesper Koll, chair of the policy committee at Asia Society Japan, moderated the session.

Different post-war security policies

Japan and Germany have long-standing relations in technology transfer, as well as in the medical and legal fields which date back to more than a century and a half. The similarity of our legal systems has provided a good basis for the close business relations that the two countries have long enjoyed. Today, both countries support a rules-based international order with the UN at its core and respect human rights, democracy, and territorial integrity.

Yet, Japan and Germany have taken different paths in terms of security policies after their defeat in the Second World War. Europe faced a very strong threat from the Soviet empire and as a consequence, it forged its own security alliance with the US, within NATO. Western European nations also decided to embark on a strong economic integration, which is now the European Union. This has shaped Germany’s foreign policy approach to a great extent. On the other hand, Japan has focused its foreign policy on relations with its partners in Asia without having any kind of regional security alliances. Yet, both being close allies of the United States, Japan and Germany have always been very much united in the Western camp in general.

The evolving role of G7

The Group of Seven (G7), which was founded more or less because of the monetary problems in the 1970s, has now developed into a forum for coordinating our policies in many fields. G7 ministers are discussing policies that that have more to do with domestic affairs; and this means that although not as a formal alliance or supranational union, we have reached a stage where our policies are extremely closely coordinated. The Japanese presidency has done an excellent job in this respect this year.

An outlook on Japan-Germany relations

We have also seen an unprecedented intensity of mutual bilateral visits between Japan and Germany. The two nations share similar situations in the international field. The third and fourth largest economies in the world, Japan and Germany are both strong security providers with strong armies, but maybe not strong enough to face the challenges of the 21st century alone. Both countries have recently issued new national security strategies.

In the field of economic security as well, Japan and Germany are facing common challenges. Despite intense globalization, supply chains and open markets have not developed as positively as we had expected. Both countries need to be able to supply their industries with critical raw materials and sustainable energy, and therefore need to join forces to achieve these interests as well. Germany and Japan have shared interests in policy alignment in climate and energy policies.

The international order is changing rapidly and not in a positive direction. The Russian war of aggression against Ukraine has made these risks very clear. For the first time since the Second World War, we feel that there is an imminent threat to the eastern borders of NATO. After 1990, Europe had somewhat hoped that it would face no immediate military threats, but it is now recognizing that this is not the case. Therefore, Germany’s entire security policy has to be aligned with these recent developments. It has also been recognized that security cannot be regionalized and has cross-regional impacts. Hence, Germany appreciates the close coordination that it has with Japan on the Russian aggression.

Fireside chat with Mr. Jesper Koll

Bilateral business relations

Business relations between Germany and Japan have been mainly focused on either trade, technological exchange, or doing business together in third markets, rather than on direct investments. A remarkable intensification in technological cooperation is expected because both economies face huge tasks of transformation. They both need to digitalize their economies and manage a tremendous transition in the energy field. This will require enormous investments and the huge costs of technology development will have to be shared.

Migration policy

Germany is very much aware of the need for migration to fill the shortages in its labor force. It has just passed a new law seeking to attract a qualified labor force from worldwide. In principle, Germany is not a migration country, but it has received asylum seekers. More than a million people have come to Germany from Ukraine alone.

Germany, along with other European countries, is facing a serious problem of illegal migration. Therefore, the European Union is currently engaged in very intense discussions on how it can better control illegal migration and streamline the asylum seeker processes. There is a need to distinguish among the three groups: legal workforce influx, asylum seekers, and illegal migration.

Germany has learned that to have migrants stay in the country for the long term, much effort is required to facilitate their integration as much as possible. There are certain prerequisites to successful integration; one of the most important is language training. Another is the intention of staying long enough to have a family in Germany.

Over the last 15 years, we have seen quite a change in the membership of the board at many major companies in Germany. Many senior leaders have a migration background, and some have made it to the top. We need to let people know that our countries are not temporary destinations where one comes for a couple of years to make money, but a place where you can actually have a career and be successful.

Different approaches to energy security

Germany has been strongly reliant on Russian gas imports with the illusion that they would be safe even if political problems arose. This was based on the experience it had with the Soviet Union during Cold War times when millions of soldiers were on both sides of the Iron Curtain. Within a few months, Germany replaced the deliveries of gas through pipelines from Russia with LNG deliveries by building new LNG ports. With two new LNG ports to be built within a year, Germany’s LNG capacities should be sufficient to guarantee supply for next winter.

German policymakers decided 11 years ago after Fukushima to completely phase out nuclear energy. This policy has been pursued consistently and the last three reactors were decommissioned at the end of April 2023. After the Russian invasion of Ukraine, there was a discussion in Germany about whether they should be continued, but the final decision was that it would cost more to continue operating the remaining nuclear power plants than to deploy renewable energy. The focus of nuclear discussions in Germany has shifted from security concerns to its financial aspects, including the long-term costs of decommissioning and nuclear waste disposal. Therefore, this debate is unlikely to be revisited in Germany in the future.

The strong similarity between Japan and Germany is that both countries are very much dependent on energy imports. In order to phase out coal, Germany is switching to renewable energy, which has reached 50% of its primary power supply. The increased integration of renewable energy not only helps Germany fight climate change but also strengthens its economic security. This is different from the discussion seen in Japan, where renewables are not as positively seen and thus the focus remains on importing energy, but from diversified sources to enhance its energy security. Germany also sees good business opportunities in early investment in the research and development of renewable technologies, which promise to become a huge export business in the future as the rest of the world shifts to renewables.

A two-track approach to the Inflation Reduction Act

The biggest economy in the world, the U.S. currently runs a domestic-focused industrial policy, which has intensified the offshoring of production to the U.S. and triggered a tremendous amount of additional foreign direct investment to fulfill the requirements of the Inflation Reduction Act (IRA). Both Japan and Germany have been openly critical of the IRA, which contains provisions that disadvantage their companies. They have ongoing discussions with the U.S. administration on adapting some of the regulations of the IRA in a way that would make it more acceptable. Another important approach to this new trend is to avoid entering into a race of subsidies among the U.S., Europe, and Japan, where companies start enjoying subsidy shopping, or seeking who will provide the highest subsidies.

China-Taiwan relations

What can we learn from the war of aggression in Ukraine on how we should assess the situation between China and Taiwan?

Since 1949, China has always insisted that Taiwan is part of the motherland, but the tone seems to have become more aggressive in recent years. China has never excluded the use of military power to regain the unity of the country and we need to be aware of the fact that it may impose political and military pressure. We have been witnessing a very strong military build-up of the People's Liberation Army. The annual increase of ships in the Chinese Navy is just about the size of the German Navy. Even if military power will not necessarily be used, military capacities that are sufficient for an invasion of Taiwan can be a strong political tool. The number of overflights of the Chinese Air Force into the airspace of Taiwan and the fortified presence of Navy ships around Taiwan are signs that a military escalation cannot be excluded. This is why the G7 Ministers also stressed that any resolution of the cross-Strait issues may only be peaceful.

The fireside chat was followed by a conversation with the floor, which covered various issues including women empowerment and Germany-Japan cooperation to improve energy access in developing countries.