Global rivalries, corporate interests and Germany’s ‘National Industrial Strategy 2030’

Abstract

This article asks how Germany could have pursued a far-reaching ‘National Industrial Strategy 2030’ despite the fierce opposition of German industry. To resolve this puzzle—which realist-inspired and institutionalist analyses struggle with—it deploys a critical state theory attuned to the uneven and combined development of global capitalism. The twin challenge of China catching up and the US forging ahead has not only prompted German officials to develop a ‘defensive-mercantilist’ response; new qualitative and quantitative evidence indicates that it has also deepened conflicts within Germany’s export industry. Small and large firms are divided over how to respond to the growing lead of US capital in the digital economy, and its major sectors have experienced Chinese inroads into high-tech manufacturing differently. I argue that the German state was/is able to advance its industrial strategy insofar as it reconciles these divergent interests. First, it has offered laxer EU cartel rules to big business and enhanced protection from digital oligopolies to the Mittelstand, in exchange for tighter foreign direct investment controls. And second, I suggest that it could win over the chemical and electrical industry, through selective state subsidies, to its plans to re-shore transnational value chains in the name of ‘technological sovereignty’.

Keywords:

• Uneven and combined development
• capitalism
• Germany
• United States
• China
• foreign economic policy
• industrial policy

Acknowledgement

This article benefitted enormously from the feedback of three anonymous reviewers and the editors. I would also like to thank Milan Babić, Mareike Beck, Alan Cafruny, Mark Schwartz and Sean Starrs for their comments on earlier drafts. And lastly, I am particularly grateful for a productive exchange with Etienne Schneider, whose 2020 article on the topic offered theoretical and empirical insights that the present article takes up and aims to add to.

Disclosure statement

No potential conflict of interest was reported by the author.

Data availability statement

The primary data that support the findings of this study are derived from resources available in the public domain. URLs to the original source are provided.

Notes

1 The final version published in December 2019 dropped “national” from its title, but for ease of reading the article uses the abbreviation “NIS 2030”.

2 I would like to thank an anonymous reviewer for inviting me to contemplate this proposition.

3 For a longer time series, see Starrs and Germann (2021). For the original approach to this dataset, see Starrs (2013).

4 The stakeholder responses to the draft Competition Act can be found here: https://www.bmwi.de/SiteGlobals/BMWI/Forms/Listen/Stellungnahmen-GWB-Digitalisierungsgesetz/Stellungnahmen-GWB-Digitalisierungsgesetz_Formular.html?resourceId=1673768&input_=1709136&pageLocale=de&templateQueryStringListen=&titlePrefix=Alle&addSearchPathId=1673902&addSearchPathId.GROUP=1&selectSort=&selectSort.GROUP=1#form-1673768.

5 For a long-term comparison of the trajectories and complexities of German and US competition policy, see Ergen and Kohl (2019).

6 The pandemic prompted the cabinet to pass an advance version of the Ordinance in May 2020 that set the reporting threshold for health, state communications infrastructure, and raw materials at 10% (BMWi, 2020a).

7 The stakeholder responses to the recent updates of the Foreign Trade and Payments Ordinance and Act can be found here: https://www.bmwi.de/Redaktion/DE/Artikel/Service/Gesetzesvorhaben/aenderungen-im-investitionspruefungsrecht.html; https://www.bmwi.de/Navigation/DE/Service/Stellungnahmen/15-VO-AWV/15-vo-awv.html.

Additional information

Notes on contributors

Julian Germann

Julian Germann is Senior Lecturer in International Relations at the University of Sussex (Department of International Relations, School of Global Studies, Brighton, United Kingdom) and author of Unwitting Architect: German Primacy and the Origins of Neoliberalism (Stanford University Press, 2021).