Germany is reportedly working on a new trade policy to reduce dependence on China, as economy minister says the country can't allow itself to be 'blackmailed'

A new trade policy is being worked on by Germany to reduce its dependence on China.

Robert Habeck said in an interview that Berlin will not allow its protectionist policies to tip competition.

He said that they couldn't allow themselves to be blackmailed.

Europe's top economy needs to look to new trading partners as key sectors rely on China.

He said that if the Chinese market were to close, there would be extreme sales problems.

China was Germany's top trade partner last year with an overall trade volume of more than 200 billion dollars. According to a recent study by the Ifo Institute, a trade war between the two countries would cost Germany six times more than the cost of leaving the EU.

According to a person familiar with the matter, Germany's leaders have considered reducing their dependence on China for years, but have begun to set the wheels in motion by drafting a new policy.

The ministry is considering policies to protect competition in Germany, such as auditing Chinese investments in Europe. Germany would be more cautious when investing in China.

Habeck did not comment on a report that Germany was considering reporting China to the WTO for unfair trading practices.

Germany and other European nations are looking to decrease their dependence on energy trade with Russia after the invasion of Ukraine.