“There is no future for Japan or Germany without a digitalised economy”

Reimagining globalisation

German Chancellor Olaf Scholz speaks at the German–Japanese Business Dialogue


JUNE 2022 Event Report / Text by Andrew Howitt / Photo © AHK Japan

On 28 April, Chancellor of the Federal Republic of Germany Olaf Scholz, accompanied by a business delegation, arrived in Japan for his first official visit to the Indo–Pacific region. That evening, he took part in the German–Japanese Business Dialogue at the Palace Hotel in Tokyo, with around 200 German and Japanese business leaders in attendance.

It was also an opportunity to mark the 60th anniversary of the German Chamber of Commerce and Industry (AHK) in Japan. The event was moderated by Marcus Schürmann, CEO of AHK Japan and delegate of German industry and commerce in Japan.

In opening remarks, Peter Adrian, president of the Association of German Chambers of Commerce and Industry, welcomed Scholz and congratulated the chamber on its anniversary.

“Mr Chancellor, it is a great honour and a pleasure for us that you have decided, despite the serious challenges in Europe, to travel here to Japan,” he said, speaking through an interpreter. “We are pleased we can discuss economic cooperation between Japan and Germany together with you and celebrate the 60th anniversary of the AHK in Japan.”

While acknowledging that many around the world are “looking to the future with deep concern”, he noted that closer cooperation between Germany and Japan could help to address the problems we are facing.

“I’m convinced that if we show what liberal and democratic social orders are capable of, we will succeed in making a decisive contribution to a better world,” he said.

The next speaker, Toshiaki Higashihara, vice chair of the Keidanren (Japan Business Federation), also highlighted the importance of tackling problems together. His focus was on the war in Ukraine.

“I believe that Japan needs to continue our resolute stance together with Germany and other G7 countries, as well as the international community, to support Ukraine to the greatest extent possible,” he said through an interpreter. “The Russian invasion of Ukraine has led us to a renewed understanding of the importance of energy security.”

He added that the conflict has caused a shortage of strategic commodities, such as neon gas, semiconductors, and palladium.

“So, it’s essential to increase resiliency in the supply chain through resource conservation measures, recycling, source diversification, as well as cooperation with allies and like-minded countries,” he said.

Higashihara concluded by expressing his respect for Scholz for chairing the G7 during these very challenging times and wished him success at the next G7 Summit at the end of June.

Then Scholz took the stage. The chancellor began by speaking about the value of the Germany–Japan relationship.
“It is no coincidence that my first trip as chancellor to this region of the world brings me here today to Tokyo, just as it was no coincidence that my first phone call to the Indo–Pacific region was to my colleague, Prime Minister Fumio Kishida,” he said through an interpreter. “Our two countries are bound by a deep friendship.”

With the invasion of Ukraine — “an attack directed towards the whole international community and its underlying peace and order” — as well as inflation, the debt crisis, and rising protectionism, Scholz cautioned against accepting the inward-looking ideas behind some of today’s buzzwords, such as “nearshoring”, “slowbalisation”, and “deglobalisation”.

“Deglobalisation is not an option for open, free trading nations such as Germany and Japan,” he stated. “What we need instead is a new, reimagined globalisation; a smarter globalisation with strong rules and institutions, further cooperation, and improved transparency; a sustainable globalisation that takes into account our finite natural resources and the needs of future generations; and an inclusive globalisation based on solidarity that benefits all citizens. This is also what Prime Minister Kishida is talking about when he speaks of a new capitalism.”

Scholz mentioned four key elements of this vision of an improved globalisation. The first point was letting shared values guide business decisions.

“With all the openness in our economies, we must re-examine what dependencies we want in the future, for example, in strategically important technologies or raw materials,” he said. “Here in Japan, the topic of economic security is heavily debated. In Germany, we talk intensively about diversification and economic resilience.”

The second element was fair, rules-based trade. Scholz noted that agreements such as the EU–Japan Economic Partnership Agreement were based on shared principles and included “standards to counter protectionism, as well as standards in the social and environmental fields”.

The third element of a reimagined globalisation was greater digitalisation.

“Technology is power,” he said. “There is no future for Japan or Germany without a digitalised economy … I refer specifically to Industry 4.0, cybersecurity, the need to digitise administrative processes, and digital infrastructure on a global scale. And we can see that there will be possibilities for Japan and Germany to cooperate in all these areas.”

Scholz gave the example of how the Japanese telecommunications firm Rakuten and Germany’s 1&1 Drillisch, a major telecommunications equipment vendor, are working together to expand 5G networks.

“In all such areas, the important thing is not just technical knowledge, but common values and data processing in alignment with the principles of democracy,” he said.

The fourth element Scholtz noted was sustainability, something he said is common to all the other points. He believes Germany and Japan’s excellence in technology can be used to accelerate the energy transition.

“Climate protection should be viewed as an opportunity in the economic relationship between our two countries,” he stated. “Through a Japanese–German energy partnership, we will seek to promote bilateral cooperation further.”

One of Germany’s targets as G7 chair is to create an international climate club, in which member nations pursue decarbonisation and adhere to specific minimum standards. Scholz said he planned to speak with Kishida about the details of this club during his visit.

“Our two countries have a very close relationship at a level almost unseen in the past,” he stated. “The reason for this is that both countries have similar challenges, and we know we will be able to overcome them together.” •